VIENNA, Austria — With oil prices off nearly 30 percent from their highs of almost $150 a barrel, OPEC oil ministers are considering what was unthinkable just a few weeks ago — cutting back output to prop up the price of crude.
No one is predicting much of a cutback, if any at all. Still, such a move would not even have been thought of with oil prices setting record after record back in July.
But the bull run appears to have paused, if not ended, which means a new look at options for Tuesday’s meeting of the 13 ministers at OPEC’s Vienna headquarters.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled by over $40, or more than 27 percent. Back then, OPEC’s main concern was pushing back against arguments from the U.S. and other key consumers that an output increase was needed to end rocketing prices. Oil ministers insisted there was adequate supply to meet demand, and blamed speculators and a weak U.S. dollar for crude’s stellar rise.
But now, the greenback has strengthened, world demand has decreased due to creaky economies, traders’ appetites for commodities have cooled — and suddenly the market appears to have turned bearish.
Still, a major cutback is unlikely without Saudi compliance, and the Saudis — de-facto OPEC policy setters who are now producing nearly a third of total OPEC output — have given no hint they favor that option. Saudi Oil Minister Ali Naimi has instead talked about a floor of $80 as the red line for action.
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