Will OPEC Cut Production?
Shokri Ghanem, the chairman of Libya’s National Oil Corporation recently stated that OPEC has many options still open to it, including a cut in global production. However, before any new cuts to production occur, Ghanem stated that OPEC needed to carefully asses members’ compliance with previous cuts.
According to OPEC, the market is flooded with oil right now and demand is dropping faster than anticipated. This has led to a drop of over 60% in the price of oil since July.
Is OPEC’s concern for the oil market based on a desire to help the global financial situation, which Ghanem said was in shambles, or is it rather to increase profits for the member countries, many of whom rely on oil revenues to fund social works in their countries? Although OPEC may have the international economy’s interest at heart, when a cartel meets and determines to cut production, many see something different.
David Crowley
