The Organization of the Petroleum Exporting Counties decided to keep production on hold Wednesday, a widely-expected move that did little to dispel worries over the current record price of crude oil.
OPEC repeated its mantra that the market was "well-supplied" on Wednesday, arguing that an economic slowdown in the United States and the wider financial crisis would scale back demand in 2008. The cartel's next scheduled meeting is in September, which suggests that it does not see any urgent need to change the supply-demand balance--despite the fact that oil is currently trading at $100 a barrel.
"If the prices are high, they are definitely not due to a lack of crude," said Dr. Chekib Khelil, Algerian oil minister and president of OPEC
The cartel accounts for some 40% of global oil production, and although its announcements do give some direction for the market, the current uncertainty has left the 15 members rather reluctant to act. (See "OPEC Could Be Powerless To Cool Crude") |
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