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OPEC: No instant remedy for oil prices
An OPEC decision to cut output by 1.5 million barrels a day will not immediately affect oil prices, the organization's chief says. The ministers of the Organization of Petroleum Exporting Countries (OPEC) agreed last week to cut 1.5 million from its 28.8 million barrels. This decision 'will take a long time to produce a definite effect' as the demand for oil is still beyond the organization's revised production, the OPEC president, Chakib Khelil, said. The price of crude oil has more than halved from a record high of 147 dollars in July. The free fall will be devastating on oil producing countries, as most are economically dependant on the commodity. The OPEC president, also the Algerian Energy Minister, said he expects the worsening financial crisis to have an intense effect on crude prices. "Everything depends on the global economic situation. If it continues to deteriorate, it is clear that demand for oil will drop, which is likely to further lower prices," he said. He also predicted prices to rise within 'the next two to three years' because of 'a lack of investment' (in drilling for more oil) which has brought many projects to a halt. Posted by: Fred 2008-11-03 |
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