OPEC rethinking production cut plans

NEW YORK: With high oil prices weighing on a struggling U.S. economy, the OPEC oil cartel is reconsidering plans to cut production this week, which could push prices above their current record levels. Instead, OPEC is likely to keep its output unchanged when its members meet Wednesday.

When the Organization of Petroleum Exporting Countries gathered in Vienna last month, the group suggested it might curb production soon to make up for a seasonal decline in oil demand. Since then, however, oil prices have risen above $100 a barrel and the economic picture in the United States, the world’s top oil consumer, has darkened significantly.


This is a time of the year when oil prices usually fall, between the peak winter and summer seasons. Typically, refineries prepare to shut down for annual maintenance and oil consumption falls. Instead, oil prices are reaching new records. Crude oil futures on the New York Mercantile Exchange closed at an all-time high of $102.59 a barrel Thursday and fell 75 cents to end at $101.84 on Friday.

“Even if OPEC is worried about a drop in demand, they don’t want to be blamed for a recession,” said Adam Sieminski, the chief energy economist at Deutsche Bank. “That would be bad public relations. So they will do nothing.”

IHT