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Opec income hits record as oil prices soar

Javier Blas, Krishna Guha and Andrew England
Financial Times [1]
Monday, Aug 11, 2008

Opec nations earned as much in the first half of this year as they did in the whole of 2007 – thanks both to record oil prices and record production – triggering a big increase in its spending.

Members of the Saudi ­Arabia-led oil exporters’ cartel took home $645bn (£335bn, €430bn) between January and June, just below the record $671bn they earned last year, according to the US department of energy.

At the current pace, Opec nations would earn about $1,245bn this year, a record.

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The recent 20 per cent drop in oil prices below $120 a barrel is unlikely to damp the earnings significantly, as higher output will offset the impact.

Industry estimates suggest that Opec production in July hit a record 32.6m b/d. The current oil price, at $116.53 a barrel, is still higher than the first half of the year’s average: $111.1 a barrel.

The flood of petrodollars has boosted Opec’s overseas spending, with imports rising up to 40 per cent from last year’s level.

Full article here [1]