“The credibility of OPEC is at stake”
The recent “plunge” in oil prices since theÂ end of summer has motivated OPEC to call for a cut in members oilÂ production by 4.3% – restricting output to 26.3 million barrels-per-day. This is in effort to halt the fall in price, and “re-stabilize” the market.
OPEC surprises with deeper oil cutÂ
OPEC agreed on Friday to curb its output by 1.2 million barrels per day, its first cut for more than two years, to halt a precipitous fall in prices.
The reduction, amounting to 4.3 percent of OPEC’s September production, was deeper than anticipated and the biggest since January 2002. It trims OPEC output to 26.3 million bpd from November 1.
“The credibility of OPEC is at stake,” Algerian Energy and Mines Minister Chakib Khelil told Reuters before the meeting that began Thursday and ended in the early hours of Friday.Â
OPEC believes that the “right price” for a barrel of oil is $55 to $60 USD – which is still 3 times to cost we paid in January 2002.