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OPEC may keep levels but lose premiums
At press time, the results of OPEC’s June meeting were unknown, but UAE Oil Minister Obaid bin Saif Al-Nasseri said there was no reason for OPEC to change its current production ceiling before the scheduled meeting. He said the ministers would review the market situation, and "if the circumstances change . . . [they] will take [necessary] measures." For years, OPEC has oversold a bbl of oil, selling for $20 what it acquired for just $2. But, OPEC’s price premium is now being threatened by Western governments and multinational companies seeking to undermine the system of royalties that forms the backbone of OPEC government income. A new book, entitled Global Oil and the Nation State, and authored by OPEC advisor Bernard Mommer, expounds a new consumer-oriented business model, characterized by low royalties and rapid production growth. The aim is to bring down the cost of oil by allowing more crude to be profitably pumped at lower prices.
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