OPEC Agrees to Cut Production, 10/24/08

Facing steep declines in oil prices, (over 57% drop since July), OPEC member nations met in Vienna to discuss their options. After all was said and done, OPEC members agreed to reduce oil production output by 1.5 million barrels per day and suggested that more drastic cuts were to come. OPEC President Chakib Khalil said, "...there will definitely be another cut... this is a crisis situation." Some OPEC members like Iran and Venezuela were pushing for far more drastic cuts in production to ramp up prices, while other members, (with western allies), like Saudi Arabia pledged to keep markets well supplied in the face of the economic crisis. Saudi Arabia
has repeatedly said it "does not want to add to the world's economic woes by pushing up oil prices." Cartel members stated that they would be happy to see a price band between $80 and $90 per barrel. In the past, some OPEC nations, most notably Saudi Arabia, have ignored production quotas but President Khelil said this time would be different. Khelil said, "Unless they meet their commitments, they will be worse off than they are now. The market is going to test whether we are committed."

See the article here. -V