In a time when the world is panic-stricken due to spiking oil prices, Venezuelan President Hugo Chavez is likely to go for a cut in oil production. In the run up to the OPEC meeting, this can sent shock waves to many countries fearing a drop in the oil supply. At the present level of supply, the oil prices remain above $70 per barrel and any further shrink in the supply would aggravate the crisis.



The high prices of oil in the international market owe to the Iran stand-off to a great extent, In the meanwhile, U.S. the world’s largest energy consumer, is likely to drive up demand in the coming months.



On the other side, the other members of the OPEC are expected to maintain production level. It has maintained its official output level at 28 barrels per day since July 2005.



However, Venezuelan Oil Minister Rafael Ramirez has defended the decision of production cut saying the oil supply to the market is normal and the inventories are rising. Hence, the decision is taken according to the market response.



Via Washington Post