Word: bbl
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...Minister of the United Arab Emirates, to commemorate the marathon twelve-day meeting in London of the Organization of Petroleum Exporting Countries that ended last week. The minister's lament reflected the mood of desperation that led OPEC to slash its official bench-mark price from $34 per bbl. to $29, the first cut in the group's 23-year history...
Before delegates from the 13 OPEC members had even left London, many energy experts were saying that the continuing oil glut would force prices down further. To keep that from happening, the members agreed to individual production quotas designed to limit their overall output this year to 17.5 million bbl. per day. That is 1.3 million bbl. less than the average rate for 1982, but 3.5 million bbl. more than the current rate. Said a hopeful Sheik Ahmed Zaki Yamani, Saudi Arabia's Oil Minister: "I have a strong feeling that this [agreement] will work out and that OPEC...
Maybe so. But at the moment OPEC is clinging to the rear bumper, and market forces are dragging the group down the road. Because of slumping demand for oil, OPEC'S production has plummeted from 30.6 million bbl. per day in 1979 to a current rate of 14 million. Unless demand snaps back sharply, the target ceiling of 17.5 million bbl. per day will be irrelevant. Even after last week's reduction in the bench-mark price, many oil buyers still balked. Said Barry Good, senior oil industry analyst with the Morgan Stanley investment firm: "I have...
Whether or not prices keep tumbling may depend on the actions of OPEC'S oil-producing competitors. Mexico, which last week lowered the charge for its Isthmus crude to $29 per bbl., is staying in line with OPEC prices. Egypt, however, lowered the price of its best crude from $29 to $27.25, and the Soviet Union has been aggressively discounting its oil to raise foreign exchange (see box). At the same time, Britain is under pressure from customers to undercut OPEC by dropping the $30.50 per bbl. price on premium-quality North...
Last week the Venezuelans were offered an allotment of 1.6 million bbl. a day, but they wanted 1.8 million. Burdened by a huge foreign debt, Venezuela needs higher oil output to help the country keep up interest payments. The Iranians were totally unrealistic. They demanded that archrival Saudi Arabia lower its output by nearly 10% to 3 million bbl. a day, while Iran be allowed to raise production to match that level. Iran, which is currently exporting only 1.5 million bbl. a day, is desperate to raise money for its continuing war with Iraq, another OPEC member. The threat...