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Business Words in the News
Friday 13 December 2002
Vocabulary from the business news. Listen to and read the report then find explanations of difficult words below.

  opec meeting
Opec agrees to cuts oil producion
Summary: The oil producers' organisation OPEC has agreed to cut oil production by about one and a half million barrels to prevent a sharp fall in prices next year. The agreement was concluded at a meeting of ministers and officials from OPEC's eleven member countries at the group's headquarters in Vienna. It will come into effect in third of January. This report from Economics Correspondent Andrew Walker.
   
The News Listen  
  This is a pre-emptive agreement. OPEC is looking ahead to likely market conditions in three or four months' time. Demand for heating oil will fall as the northern hemisphere, which accounts for the bulk of global oil consumption, moves into spring.

The price currently is relatively high, because of concerns in the market about supply disruptions - now due to the political unrest in Venezuela and perhaps in future if there is a war in Iraq. OPEC is concerned that a resolution to these problems could also push prices down.

The deal is a complicated one. The group plans to cut the amount that it actually produces. But it is increasing the formal quotas for its members. In short, this is an agreement to end the widely adopted practice of exceeding quotas. Many industry analysts are very sceptical. Countries that are heavily dependent on oil sales - as most OPEC members are - have a strong incentive to produce more than they have agreed. They have routinely done so in the past. But others think the deal might work. They point to the success the group has had in the last three years in maintaining oil prices within the target range of 22 to 28 dollars a barrel for most of the time.

This agreement is not likely to be well received in oil importing countries. The global economy is sluggish and the current, relatively high oil prices are not helping. But the oil consuming nations can take some comfort from the difficulty OPEC will probably have in abiding by its new output limits.

 
   
The Words Listen
 
  pre-emptive
something you do in order to prevent something bad happening

 
   
  the bulk of
most of, the majority of

 
   
  disruptions
things which prevent a process or event from happening easily and peacefully

 
   
  widely adopted practice
a system that a lot of people follow - here, a system that is against the rules

 
   
  sceptical
to have doubts about something

 
   
  incentive
something that encourages and motivates you to do something

 
   
  routinely
regularly

 
   
  sluggish
slower than normal

 
   
  take some comfort
to feel less worried and unhappy about something

 
   
  abiding by
following a law or a rule

 
   
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