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Saturday, November 29, 2008

OPEC Takes No Action on Oil Supply, For Now

Joanna Ossinger

FOXBusiness

The Organization of Petroleum Exporting Countries decided to postpone any decisions about changes in supply levels at a meeting Saturday in Cairo, Egypt, of the member countries’ ministers, according to media reports.

OPEC’s next meeting, in Oran, Algeria, takes place on Dec. 17. The Wall Street Journal reported that OPEC President and Algerian Oil Minister Chakib Khelil said that ministers at the Cairo meeting agreed to “increased scrutiny” in the next two weeks to monitor the situation.

Crude oil prices are down nearly 60% since reaching their peak in July around $147 a barrel. The commodity has been dragged downward as increasingly dire predictions about the state of the global economy have cut demand estimates.

“We note with concern the deteriorating situation,” the Journal reported Khelil as saying.

Crude has been trading in the mid-$50 range in recent days. Bloomberg News reported that a number of officials from OPEC countries have been saying they see $75 a barrel as a fair target price for oil.

OPEC member countries are Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Angola. Major oil-producing nations not in OPEC include Mexico, Russia and Norway, though some reports say Russia’s oil minister will attend the Dec. 17 meeting in Oran.

The drop in the price of oil has been good news for U.S. consumers, as it has led to falling gas prices, offering a bright spot in the middle of a sea of largely negative economic news.