OPEC’s 20-Day Wait

As the price per barrel for oil continues to rise and pressure increases on OPEC to release additional supplies, it appears that there is continuing confusion regarding what exactly triggers a movement by OPEC to open the spigots further. Today, an unnamed OPEC official reported that OPEC supply rise would be triggered when the daily OPEC basket price of its crudes stood above $28 for 20 consecutive days, and was not based on a 20-day average price as previously thought. Monday, June 19, was the ninth day consecutive of prices above $28 a barrel. It had originally been understood that production would be increased when the $28 level was the 20-day average.