OPEC Plans Another Oil Cut Production
Because of the lowering consumer demand for crude oil due to economic recession, the Organization of Petroleum Exporting Countries (OPEC) is planning to cut its oil production from the succeeding months to prevent prices from plummeting.
Meanwhile, oil prices continue to plummet due to overproduction, with supply surpassing the amount demanded by consumers.
The Organization of Petroleum Exporting Countries (OPEC) will meet on Sunday to discuss another oil cut production measure to prevent prices from plummeting due to overproduction.
Because of economic recession that first started in 2008, the demand for crude oil continues to plummet as consumers spend less money and businesses halt its production. With this condition, oil-producing countries overproduced the supply which resulted to the plummeting price of the crude oil thus resulting to massive profit losses.
OPEC members including Venezuela, Saudi Arabia, United Arab Emirates (UAE), Iran, Iraq, Libya, Nigeria, Qatar, Angola, Algeria, Equador, and Kuwait said agreements to lower the supply is very important to avoid price weakness.
In a press conference, Saudi Arabia’s oil minister Ali al-Naimi said that output cuts are very important to reduce oversupply since forecasts have predicted that the global economy will continue to shrink.
“We are expecting that oil demand will continue to lower, so we need to cut the supply”, he added.
Meanwhile, other nations are pressuring the organization not to implement another oil-cut measure as this will drive the prices to go higher that may potentially aggravate the global economic recession.
In September 2008, OPEC members have agreed to cut crude oil supply by 4.2 million barrels per day.
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