Vienna. Two years ago, OPEC took decisive action to push up the price of oil. Meeting here in Vienna, the 14 nations belonging to the
Vienna. Two years ago, OPEC took decisive action to push up the price of oil. Meeting here in Vienna, the 14 nations belonging to the Organization of Petroleum Exporting Countries (OPEC) agreed to cut back production by 1.2 million barrels a day. The curtailed supply, they knew, would force prices higher. And it worked. The price of oil has risen from a low of $27 a barrel in early 2016 to more than $80 a barrel last month.OPEC’s success in raising the price of oil has been a mixed blessing. American shale producers couldn’t produce oil profitably at $27 a barrel. But they are ready and willing at prices above $50. So, the higher OPEC-managed price brought a gush of U.S. shale oil to the market. Russia, too, increased exports to take advantage of the higher prices. That flood of non-OPEC oil worried Saudi Arabia, the largest OPEC producer. To discourage further loss of market share, the Saudis convinced a reluctant Iran and other members to increase production limits now. At the June meeting, OPEC agreed to increase production quotas by 1 million barrels a day, raising their collective target to roughly 33 million barrels a day. If adhered to, the new limits should keep a lid on world prices for awhile.Source: News Accounts of June 22-25, 2018. b. What is the minimum price per barrel required for U.S. shale producers to be profitable? _______ per barrel
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