Oil Rises Above $60 Thanks to OPEC, North Korea
October 9th, 2006 | by Brian Carr |The price of a barrel of crude oil was up $.71 at $60.47 in early morning trading thanks to continued fears that OPEC would decide to reduce output, as well as fears of increased geopolitical tension due to reports North Korea had successfully tested a nuclear weapon.
There are several reports circulating that OPEC will meet today to decide whether or not to reduce oil output by 4% to help end the nearly 25% drop in oil prices since mid-July. Venezuela and Nigeria have already implemented decreases in oil output, but now it appears that the nine other members of OPEC are ready to follow.
While it appears that OPEC’s possible production cut is the primary reason for oil’s price increase, the report that North Korea has successfully tested a nuclear weapon has also played a role in the price increase. While North Korea is neither a large consumer nor exporter of oil, the possibility they may have tested a nuclear weapon will only add to geopolitical tensions - the main reason behind this summer’s dramatic spike in prices.
