OPEC divided on boosting oil production

Oil barrels on the side of the road in Baghdad

TEXT OF STORY

Steve Chiotakis: The oil cartel OPEC tomorrow decides how much oil its members can pump over the next half-year. Because the global recession slowed energy use, OPEC slashed production at the end of 2008. But despite some push and pull between oil-rich countries, few expect more crude to be produced anytime soon.

From London, Christopher Werth has more.


Christopher Werth: A growing divide is opening up within OPEC over whether to boost production as the global economy tries to get back on track. Poorer members like Angola, Nigeria, and Venezuela want to close their big national budget deficits by expanding oil production.

Nick MacGregor is with stockbrokers Redmayne Bentley. But he says balancing supply and demand isn't easy.

NICK MACGREGOR: OPEC has learned a fairly brutal lesson in the last couple of years that they do have to balance price or they will kill off the goose that laid the golden egg. And so others such as the Saudis take a more balanced view that they'd rather see oil prices as high as they can possible be, but only if it doesn't start to crimp demand in America and Europe and so on.

And with oil prices hovering near $80 a barrel, some OPEC members like the Saudis are happy for production levels to stay where they are. MacGregor says we shouldn't expect any sea change in prices at the pumps until we get further economic growth, or alternately, signs that the economy might be headed into a double dip recession.

In London, I'm Christopher Werth for Marketplace.

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