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As expected, OPEC decided to cut its oil production by another 500,000 gallons a day. The outcome of the latest meeting was anticipated and is no surprise.
The meeting which was held in Abuja, Nigeria, home to OPEC President Edmund Daukoru was. Most of the members of the oil cartel were for a production cut going into the meeting. Only a few delegates thought a further cut in crude oil was unnecessary.
OPEC's goal was to eliminate the excess supplies of oil around the world in order to regain a some control on the prices per barrel. The cartel said that the oil supplies around the world are unbalanced since there was more supply than demand and said it was working to regain more balance in the market not to raise the price of oil per barrel.
Oil price per barrel have fallen by almost $20.00 per barrel since July, when they were over $78.00 per barrel to now, when they are just about $60.00.
Gasoline prices have fallen from the $3.00 per gallon mark to just above $2.00 per gallon in the past few months, with $2.29 a gallon being the national average. The surplus oil supplies in the United States have remained higher with the mild winter temperatures over most of the country. It has slowed the sale of home heating oil.
The prices at the gas pumps will begin to rise before the latest decision comes into effect, which will not be for another six weeks. Gasoline prices have been on the rise since November, inching their way higher each week. Gasoline and heating oil futures have already risen.
Many people dislike the way the cartel tries to manipulate gasoline and oil prices, and they are able to do so since they own a third of the world's oil supply. It is one of the reasons so many people are looking to alternative forms of energy, and alternative fueled vehicles. It is the main reason we do not want to be so dependent on foreign oil sources. We have little control over the pricing of the products, and in the US we depend on them daily since we drive gasoline powered vehicles.
Another outcome of the meeting was the announcement that Angola would be admitted as a member of OPEC as of January 2007. Angola produces almost 1,500,000 barrels of oil a day. Angola makes the total of 12 members.
The already existing members are Algeria, Indonesia, Iraq, Iran, Libya, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Other countries looking to join OPEC are Sudan and Ecuador.
The next meeting of OPEC is scheduled for March 2007.