The official flag of the Organization of the Petroleum Exporting Countries.
OPEC members are gearing up for a dramatic meeting on Thursday in Vienna, Austria as countries grapple with oil prices hitting four-year lows. At this time, there has been no confirmation of how Saudi Arabia and Russia — the former of which is an OPEC member — have decided how to handle the ongoing price crisis. Rumors have run rampant that Saudi Arabia, which due to its size has been seen as the de facto leader of OPEC at various times, will refuse to cut oil production, while other reports peg Russia and Saudi Arabia as discussing the possibility of cutting oil production in an attempt to limit the United States' influence on the oil market. How did we get here? Oil started its dizzying downward spiral in June — between that month and October, Brent crude prices fell about 30 percent on the back of heavy oil production. In November, oil prices hit four-year lows, falling to $84 a barrel. At close of day Tuesday, West Texas Intermediate was hanging at US$73.88, while Brent was slightly higher, at $78.20; both were down by more than 1.5 percent for the day. Part of the problem is record US oil production in the face of weakening consumption. The US has recorded a historic year of oil production, largely culled from its fracking projects in the Midwest and Texas. Indeed, North Dakota achieved a one-day record of 1.13 million barrels of oil in August, and Adam Sieminski, administrator of the US Energy Information Administration, said in July that "Texas and North Dakota now account for almost half of total U.S. oil production." Overall, US oil production from fracking has risen from 5 million barrels per day in 2008 to 7.4 million in 2013, with averages of 8.5 million expected by the end of 2014 and 9.3 million expected by 2015. Saudi Arabia holds all the cards On Tuesday, Saudi Arabia met with Russia, Venezuela and Mexico and held talks about possibly reducing oil production. However, Reuters reports that the meeting failed to yield a unanimous decision.