Gulf States to OPEC: “Not So Fast!”

Last week, I noted that Iran and Venezuela were vying to defend $100/bbl oil and push OPEC to cut output levels.

Led by Saudi Arabia and the UAE, the Gulf States are countering that position and will fight to keep production level. The consensus is that while crude has softened by $40/bbl since its high in July, another spike towards $150 could cripple world economies and have longer-lasting negative effects. Analysts of OPEC contend that a drop to $80/bbl range does not have a significant effect on the economies in OPEC nations and a floor of $50/bbl is more realistic scenario.

Tomorrow, OPEC nations will meet in Vienna, Austria to discuss their intermediate-term plans. The policy they dictate may have a direct impact on your heating bill this winter – unless you are accepting Hugo Chavez’s free home heating fuel offer.

Gulf Arab States to Urge OPEC Not to Cut Oil Output – Bloomberg.com
Organization of Petroleum Exporting Countries – OPEC.org