OPEC - October 25, 2008 OPEC Says It Will Cut Oil Output By...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
October 25, 2008 OPEC Says It Will Cut Oil Output By NELSON D. SCHWARTZ and JAD MOUAWAD VIENNA — Stung by what it called “a dramatic collapse” in crude prices, the OPEC cartel said on Friday that it would reduce output by a steeper-than-expected 1.5 million barrels a day. But that action failed to brake the price decline, and oil dropped 5 percent more by the end of the day. The oil cartel swiftly agreed to the cut in an emergency meeting at its headquarters here, and its president suggested afterward that still more production cuts were coming as OPEC struggled to get ahead of an economic slowdown so severe it could leave the world awash in oil. The stunning decline of oil prices in recent weeks has left oil-exporting countries fearful that they will have to cut government budgets, including the popular social programs that cement many leaders’ hold on power. Oil dropped to $64.15 a barrel on Friday, from a high close of $145.29 on July 3, a 56 percent decline in 16 weeks and one of the steepest in the oil markets. If prices keep falling, OPEC’s president, Chakib Khelil, said the cartel would “definitely” reduce its production again in coming months, either when it meets in Algeria in December, or sooner. “The fundamentals are not good,” Mr. Khelil, who is also Algeria’s oil minister, said in an interview after the meeting. “This is a crisis situation.” In a rare appeal that highlights the urgency of the situation for producers, the cartel is also starting to look beyond its ranks for help in stabilizing the market. OPEC called on other oil-producing countries to “contribute to efforts to restore prices to reasonable levels, and eliminate harmful and unnecessary fluctuations.” OPEC’s members control 40 percent of the world’s oil exports. Members of the Organization of the Petroleum Exporting Countries face their toughest test in years. The slowing global economy has depressed the consumption of oil in the United States, Europe and Japan, and the global economic turmoil risks spreading to emerging economies like China, long the main engine of growth in oil demand. OPEC members said they had little choice but to reduce
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

OPEC - October 25, 2008 OPEC Says It Will Cut Oil Output By...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online