Inside Report (3)
Are oil prices about to collapse? That would be marvelous news for the world's consumers. But don't rush out and buy a gas-guzzler yet.
Saudi Oil Minister Ahmad Zaki Yamani started the talk about a sharp drop in prices. He said a growing oil surplus could send prices falling faster than the gas gauge on a V-8.
US experts, however, doubt it will happen. So why is Sheikh Yamani talking this way?
"Good public relations before the OPEC summit meeting (in Algiers) next month ," suggests an American expert. He thinks the Saudis, by warning of a possible oil price "collapse," may be trying to force their OPEC brethren to unify prices near the Saudi base of $28 a barrel.
So far, each time the Saudis hike the price of their oil by $2 a barrel, all other OPEC members do the same, thereby keeping Saudi Arabia at the bottom of the OPEC price pile.
The fact is, OPEC production probably isn't high enough to send prices falling. The 13-nation cartel now produces just under 28 million barrels a day.That's down from 31 million last year.m