Oil Hits $51 a Barrel, OPEC Still Concerned

Elaine Barr, Financial News Editor

MONEYNEWS | Friday, Jan. 12, 2007 - - Crude oil prices plunged to a 21-month low of $51.80 yesterday. That's a 34 percent plunge since oil peaked in mid July at $78.40 a barrel. In fact, prices have dropped by 15 percent just this year, mostly as a result of mild winter temperatures in the U.S. that have left heating oil inventories barely touched.

Today, crude oil prices finally increased more than $1 a barrel today as traders bought up contracts.

But the increases may not be enough to quell the concerns of the Organization of Petroleum Exporting Countries which has already cut back on production to try to put a plug on the price decline. OPEC decided late last year to reduce production by 1.2 million barrels of oil a day starting last November, and 500,000 barrels a day starting Feb. 1.

Already the severe drop in oil prices has prompted OPEC ministers to consider an emergency meeting to discuss steps they can take to stop the latest drop in crude-oil prices. The cartel considered calling a special meeting earlier, but they'd rejected the idea then.

In another effort to shore up oil prices, the Wall Street Journal reported a senior OPEC official said the cartel will also consider asking other major oil producers outside OPEC such as Russia, to reduce output.