OPEC's New Price Target
The Organization of Petroleum Exporting Countries (OPEC) has recently announced it will be decreasing its overall exporting of oil at its next meeting. It intends to decrease the number of barrels exported daily by one and one-half million barrels in order to prop-up the price it receives per barrel.
No this isn't a report of a few years back when oil prices dropped to $20 per barrel. This is a recent news report in mid-December 2004. It wasn't more than a year ago that OPEC had promised to adjust export levels to maintain a price of $24 to $28 per barrel. Oil has been selling at over $50 per barrel in the last month - more than twice OPEC's target price. OPEC has been exporting oil at near maximum sustainable levels recently and has been unable to cause prices to drop back to its agreed upon price range. No they plan to cut oil production to force oil prices from approximately $47 a barrel to above $50.
It is hard to understand why the news media has not picked up on this drastic change in OPEC policy and why governments worldwide have not been up-in-arms about OPEC's change of policy. OPEC is attempting to curtail supply to force oil prices to remain on the $50 per barrel range. A price that, in this range, will continue to be a drag on the world economy.
12/21/04 ( 218 )
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