On October 16th, Oil prices plummeted below $70 for the first time in 16 months, loosing half its value since hitting a record high of $147.27, prompting the oil cartel OPEC to call an emergency meeting.

OPEC cut production by 1.5 million barrels a day starting November after their emergency meeting on October 24th one month ahead of their scheduled meeting.

Although their next meeting was not scheduled until December 17th, the OPEC cartel will meet again this coming November 29th in Cairo, most likely to make another cut in production. In this global financial turmoil, they run the risk of taking things too far as demands for energy increase during the winter months.

The drop in prices has already created problems for oil producers, who have become accustomed to high prices. Iran needs oil prices at $95 a barrel to balance the budget, Russia needs $70, Venezuela needs $60 and Saudi Arabia needs $55 a barrel, according to Deutsche Bank estimates. Cartel representatives have hinted at the idea of fixing a price high and low, which they call “ideal” ranging between $70 and $90 a barrel.

Juan Pablo Perez Alfonzo was a Venezuelan minister of energy that popularized the phrase “oil: the devil’s excrement” and the minister said that the oil corrupts the power.

Gasoline: The fall in world oil prices since July has pushed gasoline in the United States, the world’s largest oil consumer, from a high of $4.114 a gallon on average to $1.91 a gallon Monday, according to motorist group AAA.

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Source:

http://money.cnn.com/2008/10/24/markets/oil/

http://www.iht.com/articles/2008/10/16/business/oil.php

http://seattletimes.nwsource.com/html/localnews/2008429585_webgasprices24m.html