OPEC split on crude decision
TEXT OF STORY
Doug Krizner: OPEC members are meeting in Vienna today. They’ll consider pumping more crude oil onto the world market to bring down prices.
Yesterday, OPEC’s secretary general said the current price was a problem. But some members say increasing supply isn’t necessary. What are we to make of this division? Here’s Marketplace’s Jeff Tyler.
Jeff Tyler: Most OPEC members want to keep crude oil production flat. They worry about an increase in the supply from non-OPEC producers. Plus, they fear a recession in the U.S. would curb demand.
But Persian Gulf states favor a minor hike in production levels, anticipating a spike in demand this winter.
So, what’s the impact on the price of gas? Not much, according to some.
Tom Wallin: There’s not a crude oil supply problem. The reason that prices are as high as they are is because there’s a global refinery problem.
That’s Tom Wallin, president of the oil industry publishing house Energy Intelligence. He says that even if OPEC boosts production:
Wallin: It would just drive down the crude oil price, and the refined products would remain very expensive, and so refiners would make a lot of money. But it wouldn’t do that much to bring down the cost of oil to consumers.
Some OPEC members have already increased production on the sly. The cartel pumps about a million barrels per day in excess of its own quotas.
I’m Jeff Tyler for Marketplace.
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