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OPEC To Keep Oil Prices High

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OPEC voted not to increase oil production, thus virtually ensuring that oil prices will remain at historic highs.

“We have to find an acceptable figure to defend,” commented Sheik al-Sabah, who is the oil minister from Kuwait. “As Kuwait’s representative, I think $32 to $35 a barrel would be a good number but all my colleagues have a different number in mind.”

“The world economy has grown so big that little fluctuations here and there with oil are not doing so much,” Ali al-Naimi, Saudi Arabia’s oil minister, told reporters.

Bloggers are more blunt …

A Marietta College economics blog stated:

“The control exerted over western countries by OPEC never ceases to amaze me. What twist of fate gave these predominatly Islamic countries the ability to make the U.S. jump when they say “jump”, because that is the situation. We are so dependent on oil as the life-blood of our economy, that we are at the mercy of the oil producers. Over the last year, we witnessed over a 33 percent increase in the price of crude oil.

OPEC’s official range for the price of crude oil is between 22 and 28 dollars a barrel, however many analysts are suggesting an average of 40 dollars a barrel as a new target benchmark price. Currently the price is 47.18 dollars a barrel, and OPEC has already warned that as the demand for oil decreases in the spring, production will also decrease in order to keep prices from falling. So, for now consumers, say goodbye to the days when 15.00 dollars could get you over 10 gallons of gas.

Will we ever find a perfect substitute for oil?”

The CybeRedoubt blog adds

“OPEC is sending a rather confusing message these days. If they are aware that oil prices are going to be going up but are not going to produce more oil that can only mean a couple of things. Either they want the prices to stay high or they can’t produce any more oil. Either way that seems like an ominous sign.”

The Airborne Combat Engineer blog had this to say:

“OPEC warned Sunday that oil prices, already hovering near $50 a barrel, would remain high through the spring, even as the cartel decided to keep its production ceiling at 27 million barrels a day.

The decision was reached at a meeting of the 11-nation group in the Austrian capital.

This is not how a supply and demand market should work. We’ve got to continue minimizing the OPEC impact.”

Another blogger sums it up

“When you aggravate the countries that produce oil, and avoid drilling for oil in your own country to compete with a nasty cartel, this is what you get: high prices.”

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OPEC To Keep Oil Prices High
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