The Organization of the Petroleum Exporting Countries met in Vienna Saturday and called for an end to “overproduction” by some members to increase the price of oil.
The “overproduction” makes up for just over a million barrels a day.
In the short term, the cut in production would increase the price of oil, however in the long run, cutting oil production will decrease demand and lead people to find other forms of energy. I believe cutting production now will doom the oil business later.
It sounds like OPEC is looking for a target price of $70 a barrel. However, with the “shaky” global economy, many people in parts of the world can’t afford oil, which is sometimes seen as a luxury rather than a necessity.
Until the global economy perks up, oil demand will be low.
