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At OPEC, Some Worry as Oil Prices Start Falling

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posted on Sep, 11 2006 @ 02:11 AM
The more than $10 per barrel drop in crude oil prices over the last month have raised anxieties among OPEC ministers who are beginning meeting in Vienna, this week. OPEC countries produce more than 40% of the worlds oil and thos countries have been working overtime lately, pumping 27-30 million barrel a day. Some of the OPEC ministers have expressed fears that the oversupply of oil in the market may further depress the price of oil futures, while others are a bit more optimistic.
VIENNA, Sept. 10 — What a difference a few weeks can make. As OPEC ministers prepare to meet here Monday, the question on their minds is not how high oil prices will rise, but how far they may drop.

Crude oil prices have fallen more than $10 a barrel in the last month, driving down the retail price of gasoline and providing some relief for consumers. While energy prices remain high, they have not risen to the heights that many analysts had feared, in part because of a light hurricane season this summer, the cease-fire between Israel and Hezbollah, and the fact that the United Nations has not imposed sanctions on Iran.

While there is no sense of urgency about oil price increases, some members of OPEC are beginning to express anxiety about further price declines. Nigeria’s representative, Edmund Daukoru, who currently holds the rotating presidency of the group, said Sunday, “I am very concerned about the drop in prices. We do not know how much further they can go and we need to review that in depth.”

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While oil prices at the pump have dropped quite abit over the last few weeks, it doesn't appear that the drop in crude oil prices will have the effect of reducing those prices much further. I have heard some oil analysts predict that the price may drop as low as $2.25 per gallon in the near term but most experts in the field don't express much optimism that we will ever see prices below $2.00 per gallon until we lessen our dependence on foreign oil.

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Related Discussion Threads:
Are higher oil prices just inflation catching up with us?
so NOW they drop the gas prices


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