Peak Oil News: OPEC can do little to help oil production, costs

Sunday, September 12, 2004

OPEC can do little to help oil production, costs

Ministers for the Organization of the Petroleum Exporting Countries are gathering in Vienna on Wednesday to grapple with whipsawing prices and the world's seemingly insatiable demand for oil. But unlike past sessions, when market-makers anxiously awaited the cartel's decisions, the Sept. 15 meeting is getting little more than shoulder shrugs from analysts.

That's because OPEC faces a Hobson's choice.

The group could officially raise its production quotas even though virtually every country in the cartel — from Saudi Arabia to Nigeria — already is producing all the oil it can. Members have ignored production quotas for months, so adjusting the allotments would be largely symbolic and do little to curb oil prices.

Or the cartel can raise its price band — OPEC's target set in 2000 for how much one barrel of oil should sell for — from the current $22 to $28 range to a higher $26 to $34 range that is still substantially lower than where the market values oil today.


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