OPEC states struggle to pump less yet keep spending

LONDON (Reuters) – Uncertainty about how far world fuel demand and oil prices will fall has made it harder than ever for OPEC members to agree on how to balance group output policy against the divergent needs of their individual budgets.

Oil’s collapse from almost $150 a barrel last July cut OPEC earnings by $356 billion in six months and they could drop by a further 50 percent this year, the group’s Secretary-General Abdullah al-Badri said.

But in 2008, the Organization of the Petroleum Exporting Countries made about $1 trillion, some of which it squirreled away for leaner times.

With oil around $40, member countries can still turn a profit, especially as output costs have dropped.

“They’re all laughing now in terms of operating costs,” said Mike Wittner of Societe Generale. “But this isn’t about operating costs. It’s about funding the budget of the country.”

Reuters