OPEC scrambles as crude prices spiral

[defendandprotect]

VIENNA, Austria – When oil prices go down, OPEC slashes production and the cost of crude rises, right?

Maybe not this time. With the global economy edging toward recession, the specter of diminishing supply has been blown away by a stunning lack of demand that now has the market in a stranglehold.

Ahead of Friday's emergency meeting of the Organization of Petroleum Exporting Countries, the question is not whether the 13-nation group will cut production, but by how many millions of barrels. Spooked by prices that have slid more than 50 percent from record highs of around $147 in July, OPEC is on the defensive.

Chakib Khelil, Algeria's oil minister and OPEC's current president, speaks of a "significant" reduction from the present daily output of around 29 million barrels, and expectations are that the group could pare up to 2 million barrels from that figure.

Rare cuts of that magnitude have in the past led to significant crude



http://news.yahoo.com/s/ap/20081022/ap_on_bi_ge/opec_meeting

[defendandprotect]

1. Maybe they need some losses to offset prior year gains -- we can bail them out next year!

[MadHound]

2. This could be the first sign of a major economic downturn

Energy prices start to deflate, everything else starts to deflate, and voila, we've got a full blown depression.

[still_deciding]

3. How much profit do they need?

I read an article that said as long as oil prices were above $50 a barrel, OPEC countries would still be profiting.
So at $65 to $70 a barrel, isn't that enough of a profit for them?

[enid602]

4. dollars

Remember, though that OPEC collects in doallrs, which have gone up about 20% or so vis-a-vis the Euro in the last couple of weeks. Although they´re getting fewer dollars per barrel, those dollars are worth significantly more.