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OPEC Members Split on Oil Strategy
Sagging oil prices are generating sharp disagreement among members of the Organization of the Petroleum Exporting Countries, The Wall Street Journal reports.
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Sagging oil prices are generating sharp disagreement among members of the Organization of the Petroleum Exporting Countries, The Wall Street Journal reports.
Crude oil prices have dropped more than 20% since mid-year to less than $89 per barrel for Brent oil, the global standard. Analysts attribute lower prices to the spread of more fuel-efficient vehicles, increased output in Russia and the U.S. and a cooling global economy that lowers overall energy demand.
But the Journal notes that non-OPEC producers have not cut back because they can operate profitably at current prices, thus keeping global oil prices low.
Kuwait's oil minister believes petroleum prices have a "natural floor" of about $77 per barrel, That price, he says, is about equal to the average cost of producing oil in Russia and the U.S.
Some OPEC members, notably Venezuela, want the cartel to reduce its output and at least hold the line on prices. Saudi Arabia, the group's largest producer, began pumping less crude earlier this year. But it also lowered its prices and is pushing customers for longer-term contracts to lock in future business.
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