Tougher Year Lies Ahead for OPEC

For OPEC, the easy days may be drawing to an end.

Thanks to strong demand, a global economy that continues to show strength, limited increases in supplies from producers like Russia and Kazakhstan, and repeated interruptions in production from the Gulf of Mexico, members of the Organization of the Petroleum Exporting Countries have gone through 2005 with what has been, to them, a perfect alignment of stars: high prices along with high production and high demand.
With prices still holding near $60 a barrel and winter demand in full swing, OPEC ministers will meet Monday in Kuwait City for what increasingly looks like a purely formal gathering. For the time being, the group is likely to stick to its current policy of pumping at full tilt.

But after having avoided divisive issues for the last year, OPEC is likely to face a much different picture next year. Analysts said the group might have to consider production cuts, as non-OPEC producers increase their own supplies, if it wants to stop prices from falling too low.

NY Times