OPEC Determined to Raise Oil Pricesby Tim Manni
While consumers celebrate cheap gas prices, OPEC is panicking. The Organization of the Petroleum Exporting Countries has rescheduled their “Extraordinary Meeting” three weeks early to deal with the 50% drop in oil prices since July. Oil prices rose to over $68 a barrel today after dipping as low as $66.12 yesterday afternoon.
“We should also remember that low prices will, without any doubt, result in the cancellation of many upstream and downstream projects, and this will lead to future long-term supply problems,” said OPEC Secretary General HE Abdalla Salem El-Badri in a speech delivered at the 3rd International Energy Week in Moscow this week.
“I should like to stress, however, that despite the current financial stress and its inherent uncertainties, and the increasingly tight access to credit for businesses in all industries, OPEC remains committed to ensure the market is adequately supplied at all times.”
All of the OPEC countries have billions of their country’s dollars invested in oil production, and the lack of consumer consumption is hitting their pockets hard. While OPEC is likely to cut production at their newly-scheduled meeting on October 24 to keep oil prices from falling further, judging by the secretary general’s words, OPEC is committed to pumping enough oil to meet the returns on their investments, plus some.
As consumers, we can continue to control the direction of gas prices by limiting our consumption. Reduced-consumer consumption has made a direct impact on falling prices. Demand for gasoline has dropped 6.4% since last year. “Last week, 62.9 million barrels were sold at retail locations, compared to 66.9 million barrels that were sold during the same week in July when gasoline prices surged to a record high,” wrote Emily Maltby on Tuesday in a piece from CNN Money.