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OPEC is anxiously seeking measures to curb the decline in crude oil prices

OPEC is anxiously seeking measures to curb the decline in crude oil prices

November 28, 2008

[China paint information] the unity of the organization of Petroleum Exporting countries (OPEC) may face the first real test in a decade. The organization will meet in Cairo on Saturday, and Member States will jointly discuss how to deal with the challenges of falling oil prices, weakening demand and shrinking income; At present, its total crude oil production accounts for 40% of the global production

opec is anxiously seeking measures to curb the decline in oil prices, but moderate parties led by Saudi Arabia have strong tolerance for the decline in oil prices, while countries such as Iran and Venezuela are highly dependent on oil export revenue. The two groups have been in confrontation for many times in the past. As the international oil price continues to weaken, the conflict between the two has surfaced again

when the oil price fell to $10/barrel in 1998, OPEC successfully abandoned its differences and unanimously supported the oil price, while the vigorous development of the world economy and the tightening of supply have kept the oil price increasing in the past 10 years

however, with the deterioration of the financial crisis, the oil price has fallen from $145 hit this summer to $55, the lowest in three years

opec has reached a measure to reduce production by 2million barrels per day in the past two months. Although analysts believe that the member states of the organization basically abide by their commitments, the impact on the oil market is not obvious

since the meeting a month ago, the reference price of OPEC crude oil package has fallen by half, hitting $42 last week

the hardliners of the organization are actively promoting greater production reduction, and some countries are trying to organize non OPEC oil producing countries to take joint action. The Venezuelan oil minister believes that the production should be reduced by another 1million barrels/day. This proposal has received the support of Iran, but whether it can finally be approved by the organization is still unknown

chakib, chairman of OPEC, said with displacement control Khelil that it is necessary to determine whether countries have fulfilled their commitments before reducing production again

Greg Priddy, an oil analyst at Eurasia, a political advisory body, pointed out that there are serious differences among OPEC oil producing countries, and countries have different tolerance for oil prices

analysts also said that even if OPEC reached a production reduction agreement, member countries may not strictly abide by the quota

Iran, Russia and Venezuela, which benefited the most from the rise in oil prices in the past, also lost the most. Lawrence Goldstein, a senior energy analyst, said that it should be said that the current oil price has fallen below the balance point of all countries, and the level of $50 or even lower is not in the interests of all OPEC countries

according to Barclays' data, the last time the oil price fell to $50 was at the end of 2006, when OPEC reached an agreement to reduce production by 1.7 million barrels per day, but the actual reduction was only 900000 barrels. 2. Cleaning and cleaning: some dust will inevitably be produced in the process of the experiment.

Deutsche Bank pointed out that even if OPEC actually reduces production, according to historical experience, its role in improving oil prices will take months to reflect

the bank believes that given the global economic slowdown is difficult to reverse rapidly, the downward pressure of oil prices, Hexion has launched a joint development with Fraunhofer Engineering Center on a series of composite production technologies, which can last until 2009, and OPEC will face pressure to reduce production in the next 12 months

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