OPEC tried to stabilise falling oil prices

CRUDE oil prices were given a short lift by 8.1 per cent to US$50.05 a barrel at news that oil production is to be cut by 2.6 million barrels a day.

The oil cartel, the Organization of Petroleum Exporting Countries (OPEC), will cut production by 2 million barrels a day and non-members Russia and Azerbaijan will do the same by 600,000 later this week.

However, the price per barrel later dropped again to $44.98.

The price of oil has fallen 70 per cent since peaking in July at $147 a barrel. This has meant a knock-on fall in jet-fuel prices where the average market price fell 18.5 per cent – from $2.32 to $1.89 a gallon – in October.

Consumption fell 11 per cent from this time last year. This combined with the fall in oil price has led to a 24.6 per cent cut in the total aviation industry’s fuel bill: $4.9 billion for October down 24.6 per cent from July’s high of $6.5 billion.

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