OPEC is in a state of panic, as the downward trend in the price of oil shows no sign of abating. OPEC’s move to stem production has not managed to shift the market upwards and oil prices have seen a drop of 68 percent, since their record high in July 2008. While the gloomy global economic data is the primary reason for the inability of OPEC to push up the price of oil, the inability of OPEC to confirm the amount of oil their member countries are producing is also a major obstacle. This dilemma was illustrated at the recent OPEC gathering in Cairo where the market was expecting an announcement that oil production would be cut further. Instead OPEC was still striving to ensure previous production cuts had been carried out. The challenge of verifying whether production cuts — agreed to by its members — have actually been carried
