America
12-17-2008, 11:43 AM
OPEC agreed on a production cut of 2 million barrels a day today, according to news reports, as the cartel that produces 40 percent of the world's oil tries to stop a five-month slide in prices.
Saudi Oil Minister Ali al-Naimi earlier told reporters gathered today for the meeting in Algeria that the group would announce "a significant cut" and predicted "a reduction of 2 million barrels per day from what we are doing today," according to the Associated Press.
Whether that will be big enough to offset the decline in demand remains to be seen. Many consumers reduced their use of petroleum products in the summer, when prices spiked to $147 a barrel, and the slumping economy has pushed oil consumption down even further.
Today the Energy Information Administration, part of the U.S. Energy Department, said U.S. petroleum consumption would remain essentially flat through 2030 as a result of conservation, more efficient cars and the increased use of biofuels. Earlier the EIA predicted a drop of more than 3 percent in motor fuel use in the United States in 2008.
The Organization of the Petroleum Exporting Countries has met four times in four months in a bid to stabilize oil prices, which the OPEC countries rely on to balance their budgets. In an effort to spread the pain of production cuts more evenly, the group has appealed to non-OPEC oil producers, especially Russia, to trim output.
Senior oil officials from both Russia and Azerbaijan are expected to announce production cuts, but most analysts believe that those reductions represent declines in output that were going to happen anyway because of lagging investment in Russian oil fields and delivery problems in Azerbaijan.
Link:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121701314.html?hpid=topnews
Saudi Oil Minister Ali al-Naimi earlier told reporters gathered today for the meeting in Algeria that the group would announce "a significant cut" and predicted "a reduction of 2 million barrels per day from what we are doing today," according to the Associated Press.
Whether that will be big enough to offset the decline in demand remains to be seen. Many consumers reduced their use of petroleum products in the summer, when prices spiked to $147 a barrel, and the slumping economy has pushed oil consumption down even further.
Today the Energy Information Administration, part of the U.S. Energy Department, said U.S. petroleum consumption would remain essentially flat through 2030 as a result of conservation, more efficient cars and the increased use of biofuels. Earlier the EIA predicted a drop of more than 3 percent in motor fuel use in the United States in 2008.
The Organization of the Petroleum Exporting Countries has met four times in four months in a bid to stabilize oil prices, which the OPEC countries rely on to balance their budgets. In an effort to spread the pain of production cuts more evenly, the group has appealed to non-OPEC oil producers, especially Russia, to trim output.
Senior oil officials from both Russia and Azerbaijan are expected to announce production cuts, but most analysts believe that those reductions represent declines in output that were going to happen anyway because of lagging investment in Russian oil fields and delivery problems in Azerbaijan.
Link:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121701314.html?hpid=topnews