OPEC Panics as Oil Plunges

Cartel plans emergency meeting this week to cut production
By Jason Farago,  Newser Staff
Posted Oct 22, 2008 8:33 AM CDT
Iranian Oil Minister Gholam Hossein Nozari. OPEC could slash output in an effort to stop crude's downward price spiral.    (AP Photo/Vahid Salemi)
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(Newser) – Earlier this year the nations of OPEC were riding high as booming economic growth and tight supplies buoyed crude above $100. But now a barrel of oil is $70 and dropping fast, and frightened petroleum producers are holding an emergency meeting this week to discuss a production cut. As the New York Times reports, a global fall in demand could have major repercussions for nations that have profited from the black gold.

Iran and Venezuela both require an oil price of $95 to balance their budgets, while Nigeria and Iraq have both said they face shortfalls as crude becomes cheaper. Yet energy experts suggest that the cartel will have a tough time controlling oil prices in the midst of a global recession and fluctuating demand. And even if OPEC agreed to a production cut, it may find it difficult to get all member states to abide by it.