Venezuela

OPEC to Cut Oil Output

Recent drops in crude oil prices have caused stress for oil producing nations such as Iran, Libya and Venezuela. Predictions show that prices could drop as low as USD 10 per barrel. Currently prices are about USD 68 per barrel after a record high this past July of USD 147.27 a barrel. This is more than a fifty percent drop. Due to the crisis, Organization of Petroleum Exporting Countries (OPEC) has called an emergency meeting in Vienna to resolve the issue.

The thirteen members of OPEC met in Vienna this week to discuss the drop in oil prices to due to overproduction. Venezuela is urging the organization to cut production by one million barrels per day. The need to stabilize the market by working with each other is evident. OPEC produces forty percent of the world’s oil. By working together on this issue, these states will hopefully fix issue. There is currently a disconnect between the supply of oil and the demand for it, or lack thereof. The financial crisis is further worsening the issue for these states. By working together on this issue through OPEC, the thirteen oil-producing states have decided to cut production by 1.5 million barrels a day. This is a compromise between states such as Iran and Libya who desired to cut production by 2 million barrels per day and states such as Venezuela that only saw the need for a one million barrel per day cut. It was also a compromise for Saudi Arabia who did not see the need for a cut at all.

Liberal

http://english.eluniversal.com/2008/10/23/en_eco_esp_venezuela-proposes-c_23A2086447.shtml

http://news.xinhuanet.com/english/2008-10/24/content_10241871.htm

October 24, 2008 at 11:26 am