Word: opec
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...dilemma facing the Organization of Petroleum Exporting Countries (OPEC) as it meets today in Vienna is not whether to cut production, but how to ensure that the 11 member states and such non-member producers as Norway, Russia and Mexico stick to their agreed cutbacks totaling 1.5 million barrels. Analysts are skeptical over whether Russia, Venezuela, Nigeria and others will avoid the temptation to exceed their new production quotas, which would quickly unravel the agreement -- and even the oil cartel itself. After all, it?s not as if renegades face the prospect of having their legs broken or anything...
...OPEC, the international oil-producing cartel, is fighting for its life amid tumbling oil prices and members' cheating on their quotas. That, says TIME business writer Bernard Baumohl, is the reason Saudi Arabia yesterday secured an agreement from Venezuela and Mexico cut oil output -- a deal quickly emulated by Kuwait, Iran and the United Arab Emirates...
...Overproduction and falling demand caused by the Asian economic crisis and the unusually mild winter has sent oil prices plummeting, while cheating has bedeviled OPEC?s attempts to reverse the trend by cutting production. ?Venezuela has been notorious for cheating,? says Baumohl. ?Although in the new agreement they?re going to cut back production by 200,000 barrels a day, they were, in fact, producing 700,000 barrels more than their OPEC quota allowed,? says Baumohl...
...deal holds it may result in a moderate price increase, says Baumohl. If it fails, the price could fall even further and OPEC may permanently lose its power to set prices. Either way, the immediate effect for Americans will be felt in the futures markets rather than at the gas pump...
...something new and unwelcome. Only the Great Depression--an apt name--had presented a comparable challenge to national optimism, and that was followed by the reassuring wartime victory and postwar boom. In the '70s that boom gave way to a different explosion--in oil prices, interest rates and inflation. OPEC would prove to have powers that NATO could only dream of. Even the environmental movement would sound a warning: air and water, the fundamentals of life, were in limited supply. Though that mood receded in the '80s, traces of it linger in the new skepticism about large government undertakings, whether...