OPEC oil price falls below $28

The basket oil price used by the Organisation of Petroleum Exporting Countries (OPEC) to help determine its production policy fell below $28 today for the first time for four months, the organisation said.

The price, based on an average of seven crudes, stood at $26.58, according to the OPEC secretariat in Vienna.

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The 11-member grouping has increased production four times in the last year in a bid to ease crude prices which soared to 10-year highs above $35 in recent months.

The price of oil has sunk to four-month lows in recent days amid confidence notably that Iraq could soon resume exports, leaving the market with copious supplies of crude.

Under a price-band mechanism agreed in March, OPEC undertook to increase production by 500,000 barrels per day if the basket price remained above $28 for 20 consecutive days.

The mechanism was triggered in October, but OPEC ministers also decided at least once not to trigger the mechanism although the conditions for its implementation had been fulfilled.

The OPEC basket price has remained almost constantly above $28 since May, apart from one dip in early August, according to OPEC figures.

The next OPEC ministerial meeting is scheduled for January 17th in Vienna.

-- Martin Thompson (mthom1927@aol.com), December 06, 2000