How Low Will OPEC Go?
If U.S. crude prices fall below $40 a barrel, OPEC will consider lowering formal output limits.
Last week, average crude oil prices of OPEC (Organization of Petroleum Exporting Countries) went up $1.18 to $36.90 per barrel according to the OPEC Secretariat.
In reference to U.S. benchmark West Texas Intermediate an OPEC source said, “If WTI goes below $40 then we’ll think about lowering the ceiling by 1 to 1.5 million.”
“OPEC producers Saudi Arabia, Iran, Qatar, the United Arab Emirates, Kuwait and Indonesia were in New Delhi for talks with Asia’s biggest consumers – China, Japan, India and South Korea.
OPEC agreed to trim output in excess of official limits in a bid to stem a slide in world prices, which fell in December to five-month lows close to $40 a barrel.”
“OPEC member countries have decided to hold a ministerial meeting in Vienna on Jan. 30 to discuss crude oil output policies in next phase. It’s possible that OPEC will discuss the plan to cut daily output by 1.5 million barrels.”
With winter weather “hampering” the oil market, energy analyst, Phil Flynn had this to say, “Cold winter weather and its impact can’t be ignored with supplies far behind last year.”
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