With oil prices off nearly 30 percent from their highs of almost $150 a barrel, OPEC oil ministers are considering what was unthinkable just a few weeks ago ї cutting back output to prop up the price of crude.
No one is predicting much of a cutback ї if any at all. Still, such a move would not even have been thought of with oil prices setting record after record back in July.
But the bull run appears to have paused, if not ended, which means a new look at options for Tuesday's meeting of the 13 ministers at OPEC's Vienna headquarters.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled by over $40, or more than 27 percent. Back then, OPEC's main concern was pushing back against arguments from the U.S. and other key consumers that an output increase was needed to end rocketing prices. Oil ministers insisted there was adequate supply to meet demand, and blamed speculators and a weak U.S. dollar for crude's stellar rise.
But now, the greenback has strengthened, world demand has decreased due to creaky economies, traders' appetites for commodities have cooled ї and suddenly the market appears to have turned bearish. Oil markets, however, will also be keeping a close eye on Hurricane Ike, which on Sunday was an extremely dangerous Category 3 storm projected to move into the oil-producing Gulf of Mexico after passing over Cuba.
Light, sweet crude for October delivery fell $1.66 to settle at $106.23 a barrel Friday on the New York Mercantile Exchange ї its lowest close since early April.
The downward spiral has led to calls from OPEC price hawk Iran ї the group's second-largest producer ї to reduce output from the nearly 30.5 million barrels a day being pumped last month by the organization's members.
Not far behind is Venezuela. While moderating recent demands for immediate output cuts, Venezuelan Oil Minister Rafael Ramirez has drawn the line at $100 per barrel of oil. Anything below that should serve as a wake-up call for OPEC to tighten the spigots, he says ї sentiment that is shared by other OPEC members.
Still, a major cutback is unlikely without Saudi compliance, and the Saudis ї de-facto OPEC policy setters who are now producing nearly a third of total OPEC output ї have given no hint they favor that option. Saudi Oil Minister Ali Naimi has instead talked about a floor of $80 as the red line for action, AP reported.