Word: bbl
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...past six weeks, three leading gulf producers -- Saudi Arabia, Kuwait and the United Arab Emirates -- have opened their spigots, increasing OPEC's total output nearly 10%, to 21 million bbl. a day. Because worldwide demand for OPEC's crude amounts to only about 19 million bbl., the overflow has created a price-dampening glut. West Texas Intermediate, the benchmark U.S. crude, fell earlier this month to $12.60 per bbl., a drop of nearly $3 from its level in August and more than $7 from a year ago. The price edged upward last week, closing at $14.92 per bbl., reflecting expectations...
...does not, experts like Robert Chandross, chief economist at Lloyds Bank in Manhattan, warn that prices could drop below $10 per bbl. and remain at that level for the next six months. That would mean a repeat by next spring of the oil-market collapse of early 1986, when OPEC overproduction sent prices crashing to less than $10 per bbl. While cheap energy helps most Western economies by lowering inflation, petroleum at prices below $10 or $12 per bbl. is a painful prospect for such indebted oil producers as Algeria and Mexico and the weakened U.S. energy belt...
...latest production binge had its origins in the eight-year Iran-Iraq war, which ended with an Aug. 20 cease-fire. During the conflict, Iraq desperately needed oil revenues to fuel its war machine. As a result, the country exceeded its OPEC production quota of 1.54 million bbl. a day. Now that the fighting has ended, Iraq will have enough pumping capacity to increase its production even more, from a current level of 2.7 million bbl. a day to about 3.5 million bbl. a day within the next 18 months. With 100 billion bbl. of reserves, Iraq ranks second only...
...United Arab Emirates was the next to flout its production quotas. Long dissatisfied with its limit of 948,000 bbl. per day, the U.A.E. announced last August that it would pump 1.5 million bbl., and now produces nearly 2 million. In response, Kuwait raised its daily output from 1 million to 1.6 million bbl...
Elsewhere in the Gulf, the storm shut down hundreds of offshore oil platforms, forced 5,000 workers to evacuate and halted the daily flow of 1.7 million barrels of oil. Partly as a result, the price of oil jumped 75 cents a bbl. on world markets before declining 33 cents at week...