OPEC expected to maintain oil output (for now)
The Associated Press reports that despite a $10 drop in the price of a barrel of crude oil since mid-July, the Organization of Petroleum Exporting Countries (OPEC) is expected to maintain its output quota of 28 million barrels per day. However, there is speculation that OPEC is drawing up an action plan in the event that crude dips below $60.Jason Schenker, a Wachovia analyst, believes that demand for crude oil will slacken as economic growth slows especially if the U.S. economy falls into recession in 2007 as some economists predict.
Analysts estimate that a $10 drop in the price of crude is the equivalent of about a 25 cent drop per gallon at the pump. With crude oil currently at about $66, we're looking at the potential of a 15 cent per gallon buffer before any OPEC action is taken.
[Source: Associated Press via MSNBC]
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