World of Oil

In mid-December, crude oil futures prices climbed above $28/bbl, fueled by supply disruptions in Venezuela and a leveling out of OPEC production. OPEC’s November output was 26.91 million bopd, down slightly from October’s 26.93-million-bopd level. This is in spite of the fact that cheating among 10 group members bound by quotas actually rose 30,000 bopd, to 2.81 million bopd. Exclusive of Iraq, these 10 countries produced 24.51 million bopd in November against a 21.7-million-bopd ceiling. OPEC on Dec 12 raised quotas 1.3 million bopd, in a psychological move to eliminate cheating. Meanwhile, a prolonged strike by Venezuelan oil workers caused state firm PDVSA to declare force majeure on crude exports. The strike was part of a nationwide labor protest against continuation of President Hugo Chavez’s administration. For more on Venezuela, please see page 7.

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