OPEC's bust is America's boom! Why cheap oil is a friend to America

The price of a barrel of oil continues to plunge, bringing with it an economic boon to motorists and headaches and potential layoffs to oil producers in the U.S. and around the world.

LOS ANGELES, CA (Catholic Online) - Currently the price of a barrel of oil is hovering around $60, but the Organization of Petroleum Exporting Countries (OPEC) has decided that even if the price of a barrel of oil keeps falling, it will not cut output until at least three months after the price dips below $40 a barrel.

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OPEC made the decision in November 27, and has decided to stick with that commitment. The group's collective oil production target remains at 30 million barrels a day, the energy minister for the United Arab Emirates, Suhail Al-Mazrouei said.

"We are not going to change our minds because the prices went to $60 or to $40," he said. "We're not targeting a price; the market will stabilize itself."

Mazrouei does not believe that current conditions require OPEC to meet again before its scheduled July meeting.

"We need to wait for at least a quarter," he said.

While the price drops don't directly hurt the United States, other countries-namely Venezuela and Russia-whose budgets rely primarily on oil exports, are feeling the pain with the price drops.

The 12 nations in OPEC pumped 30.56 million barrels of oil per-day back in November, the sixth month in a row here they exceeded their target numbers, but the group is finding it hard to make money while competing with cheaper and more abundant oil produced in the U.S.

Saudi Arabia, Iraq and Kuwait all made large discounts to the prices of their oil sold to Asian importers. Speculation is rampant that OPEC, which supplies about 40% of the world's oil, is fighting to hold on to their market share as the U.S. taps into cheaper shale oil reserves. Alone, the U.S. produces more than 11 million barrels of oil per-day, the largest single oil-producer in the world, followed by Saudi Arabia and Russia.

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