Claim your bonus gift: give any amount to get 4 KaiPA coasters! Donate today

OPEC opts to cut production

Megan Williams Sep 10, 2008
HTML EMBED:
COPY

OPEC opts to cut production

Megan Williams Sep 10, 2008
HTML EMBED:
COPY

TEXT OF STORY

Bob Moon: The cost of a barrel of oil is once again above the psychological level of $100. The price is up to nearly $104 this morning after a decision from OPEC that was something of a surprise. It capped a five-hour session with an agreement to reduce output in a market it sees as oversupplied. Megan Williams reports.


Megan Williams: Traders expected the oil cartel, which met in Vienna, to keep production steady. Instead, OPEC abided by its own quotas and opted to lower output, which sent oil prices up.
Oil prices peaked in July, but since then, demand has slumped. The world economy slowed and oil production rose, which brought the cost down. Commerzbank commodity analyst Eugen Weinberg says he expects the price rise is temporary as demand growth slows in emerging economies.

Eugen Weinberg The demand growth will slow down and this will lead to lower prices because the demand growth from China has been the most important factor behind higher oil prices in the last years.

Most of the production cuts will come from Saudi Arabia, which kept output high this summer.

I’m Megan Williams for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.