A new report on the Bloomberg.com website in advance of this week’s OPEC (Organization of Oil Exporting Countries) meeting in Vienna, Austria. “Oil rose to $75 a barrel on Aug. 25, the price Saudi Arabian King Abdullah says is fair for consumers and producers,” reporters Grant Smith and Ayesha Daya wrote.
OPEC artificially controls oil prices by increasing or reducing the amount of oil that each member is permitted to produce and ship. According to Bloomberg:
“OPEC members have shipped more oil onto the market since April to capture the rise in prices. Saudi Arabia, OPEC’s largest exporter, and other Persian Gulf states are pumping near or below their specified allocation.”
However cheating among OPEC members is common because exporting oil is how they finance their governments.
Countries from Iran to Venezuela are exceeding their production targets to maintain government revenue, and the states will be encouraged to comply with their agreed limits, an official from a Persian Gulf OPEC member said.
Nevertheless, as Boone Pickens has stated time and time again, if you want to know how much imported oil is going to cost us, “ask the guys with the oil.”
According to Bloomberg, $75 per barrel is the price for the time being, but as the world’s economies begin to recover non-OPEC oil exporters such as Russia and Brazil may raise their prices to capture the expected increased demand.
The 12 members of OPEC are: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
To read the entire article from Bloomberg.com click HERE.
— The Pickens Team