Oil Down Despite Venezuela and Nigeria’s Production Cuts
October 2nd, 2006 | by Brian Carr |The price of a barrel of crude oil fell $1.88 today to close at $61.03 despite news that two members of the Organization of Petroleum Exporting Countries (OPEC) will begin to cut back on oil production due to the dramatic decrease in prices over the last two months.
Venezuela has announced that it will reduce its oil output by 50,000 barrels per day while Nigeria stated that it will reduce its oil production by roughly 5%.
Since hitting its record high of $78.40 on July 14, the price of oil has been in a free fall, going as low as $59.15 per barrel. In the midst of the steep price decline, several key OPEC members had stated they would be inclined to cut oil production as a means of keeping the price of oil above $60 per barrel.
Despite the fear that other OPEC members will also cut production, as well concerns over a “colder than average” winter in the United States, today’s 3% drop in the price of oil represents the biggest price decline in over two weeks.
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