LONDON: The Organization of Petroleum Exporting Countries may decide to cut the organization’s oil output quota as the price of crude risks falling under $100 a barrel, energy consultancy CGES said yesterday.
“The worsening economic outlook suggests that oil prices have further to fall, but OPEC, whose members are due to meet in early September, may act to prevent them from falling too far,” the Center for Global Energy Studies said in its latest monthly report. “There is a danger, though, that the Organization will over-react, cut its production too sharply and send oil prices back up,” added the London-based consultancy.
Oil futures had fallen sharply last week on the prospect of reduced demand for energy around the globe owing to slower economic growth.
Oil prices have sunk since hitting record highs above $147 one month ago.
Crude prices dropped below $113 a barrel in volatile trading yesterday as tropical storm Fay swirled toward Florida but appeared unlikely to disrupt oil installations in the Gulf of Mexico.
Light, sweet crude for September delivery fell $1.17 to $112.60 in morning trading on the New York Mercantile Exchange, after earlier rising as high as $115.35. The contract fell $1.24 on Friday to settle at $113.77 a barrel, about $35, or 24 percent, lower than its trading record of $147.27, set July 11. In London, October Brent crude fell 13 cents to $112.42 a barrel.