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Nigeria and Saudi OPEC members have voiced that a cut in oil production is necessary to bring balance to the oil market. With the surplus of oil, the prices haven't been as high as they would be if there were more demand for crude.
There is noise that this cut will be another 500,000 barrels a day, which will help deplete the 100,000 barrel surplus in todays supply versus that of a year ago in the industrial nations of the world and OPEC wants the amount to be equal to last years numbers.
The US has most of that supply, but with cold weather approaching we will lose that edge. Our supplies of oil will be used quickly as home heating oil is needed this winter, and that will drive the price of gasoline up as reserves are depleted.
OPEC will be meeting on Dec. 14, in Nigeria, home of OPEC President Edmund Daukoru. The reason for the meeting is to decide on wether to impose further cuts on crude production. The amount of the production cut will depend on the circumstances and oil prices at the time when the meeting is taking place.
Even though crude rose to 62.00 a gallon of Friday, it seems that isn't high enough for OPEC. The general feeling is that OPEC wants higher prices for their oil, and since they are at the controls, they can make that happen.
Another factor that will influence the decision will be Iraq and Nigeria. Ongoing violence is causing problems with oil production in these countries, and this is a factor in crude and gas prices rising. If these countries cannot produce the amounts of crude they usually do it could lead to even higher prices at the pumps because of the potential shortage that will cause.
There has been some talk of OPEC decreasing production but not putting it into effect until early 2007. Since its members control 75% percent of the world's crude supplies, they will be the ones who have the final say in our future gasoline and oil prices.
Not all, but most, OPEC members are for the production cuts, and we can only wait until DEC 14 to see what the final decision will be. The eleven members of OPEC are: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
According to OPEC.org: OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.