OEPC Likely to Trade Boom for Falling Prices in 2006

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 non-OPEC producers like Russia and Kazakhstan, and repeated interruptions of oil production in the Gulf of Mexico, OPEC producers have gone through 2005 with what has been, to them, a perfect alignment of the stars: high prices along with high production and high demand. With oil prices still holding near $60 a barrel and winter demand in full swing, OPEC ministers are meeting on 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 having avoided contentious issues for the past year, the Organization of the Petroleum Exporting Countries 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.
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