OPEC Slashes Output to Reach “Fair” Price
The Organization of the Petroleum Exporting Countries (OPEC) concluded their 151st (Extraordinary) Meeting of the OPEC Conference today by cutting their daily output by 4.2 million barrels from September levels. Today’s announcement did little to bring oil prices anywhere near the range Saudi Arabia’s oil minister had hoped for at the beginning of the month. After the meeting, as of 11:40 a.m. EST, oil futures dropped by 7.4%, or $3.27, to $40.35 a barrel.
The over-$100 decline in oil prices since July forced OPEC to call two additional meetings in order to develop a production strategy that would return the price of crude back to a “fair” price. We reported at the beginning of the month that “Saudi Arabia’s Oil Minister Ali al-Naimi said $75 a barrel was a sufficient and fair target for oil prices that would keep global oil projects and production on time and efficient.”
