This will be a real test of whether the last few good years have made OPEC any more disciplined in the face of bad years.
The rise in US production means the world's reliance on oil from traditional oil producing countries in the Middle East, which make up Opec (the Organization of the Petroleum Exporting Countries), would end soon, according to the report.
If the price stayed up for any period of time, it would make non-OPEC members who could produce oil more likely to do it, which would further drive the price down...
Whether the kingdom steps up production remains to be seen, and energy experts are watching closely to see what if any decisions are made on OPEC production and prices at the organization's next meeting in June.
So keeping oil prices low may in fact make sense for Opec.
What is Opec to do?Opec members see their trading revenues decline in real terms as the dollar drops.
(In an earthier metaphor, Juan Pablo Perez Alfonzo, the Venezuelan diplomat who helped create OPEC, called oil "the devil's excrement").. Persian Gulf countries, which sell more oil than any other nation in the world, are preparing for the changes they'll have to make.
Norway, the third-largest oil exporter, will trim output by 100,000 to 200,000 barrels a day if other non-OPEC nations make a similar cut, said Einar Steensnaes, the country's oil minister.
If non-OPEC production were to stagnate or decline, that would simply increase the market power of OPEC, making it more likely that prices will stay high.Tax demandsIf their interest is in energy policy rather than mere tax-gouging, politicians should address the demand side of oil, not the suppliers.
