According to the Petroleum Intelligence Weekly, OPEC was producing between 15.5 million and 15.9 million barrels a day in January, within the ceiling of 16 million set by OPEC last October in hopes of keeping the price up. The OPEC level of production was then 16.7 million barrels a day.
"Saudi Arabia and the other low-cost producers," he said, "are thought to have made clear, in the strongest possible terms, that should high-cost producers start a price war, then the low-cost producers would finish it." The price that is usually discussed, under the present OPEC system, is that of a barrel of Saudi Arabian light crude. This price dictates what OPEC charges for various other kinds of oil, depending on such factors as whether the oil is light or heavy and whether it has much or little sulfur. The price for Saudi Arabian light oil is called the benchmark price by OPEC.
Confusion has arisen because one kind of OPEC oil is actually selling on the free market for more than the OPEC price. Arabian heavy crude, which OPEC sells at $26.50 a barrel, sold at 25 cents a barrel more on the spot market last week.