Word: opec
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Normally, meetings of the 13-nation OPEC cartel are accompanied by pomp, pageantry and no small amount of worldwide hand wringing as the cartel's jetabout ministers swoop into distant capitals to push up the price of oil. Yet when word leaked of a secret gathering in Geneva two weeks ago of six of OPEC's top ministers, who had assembled at the invitation of Saudi Arabia to discuss pricing and production strategy, the oil-consuming nations seemed distinctly more relaxed than in the past...
That was because, for the first time in years, the topsy-turvy international oil game is tilting slightly in favor of the consumers. Not only has the industrial world's economic downturn pushed oil consumption to its lowest levels in five years, but OPEC's share of the world market is itself shrinking...
Though it remains by far the most potent force in the oil trade, OPEC is seeing its role being gradually eroded, both by disputes among its members and by happenstance. Production is tailing off in Venezuela, Nigeria, Libya and other African countries, while for much of this winter the war between Iran and Iraq choked off almost entirely exports from those two producers. Result: in 1980 OPEC production slid by 13%, its biggest drop ever...
Meanwhile, the soaring cost of OPEC oil, which has climbed by 160% in the past two years, to an average $35 per bbl., has spurred conservation. In the U.S., petroleum consumption is down more than 8% from 1979 levels, and imports have dropped by 20%, to 6.3 million bbl. daily...
...same time, according to the authoritative Petroleum Intelligence Weekly newsletter, stepped-up oil exploration efforts are boosting output in many non-OPEC areas. During 1980, production jumped by 32% in Mexico, by 10% in the North Sea and by 1.3% in the U.S., which is experiencing its biggest drilling boom since the mid-1950s...