OPEC vows to target oil prices by production increase

[lovuian]

http://feeds.bignewsnetwork.com/?sid=59b7ed7c0ea71c6f

Big News Network.com Wednesday 23rd February, 2005

The Organization of Petroleum Exporting Countries was in the hot seat again Wednesday, reassuring the West that it would indeed raise its crude production to cool off prices that topped $51 per barrel this week.

Despite OPEC's stance that there was not a worldwide shortage of crude, the cartel's president told reporters in the Persian Gulf that export quotas could be raised at its March 16 summit if the bullish and volatile trading continued on the world futures markets.

"If the prices rise further, there will be a reaction from OPEC to help lower these prices," OPEC President Sheikh Ahmad al-Fahd al-Sabah said in a dispatch from the British Broadcasting Corp.

snip...


"Greed and arrogance have taken over the OPEC cartel," he said. "They'll probably be out today trying to talk the market down, but only because the market has already achieved their goal and gone over $50."
more...

According to this the OPEC cartel is playing God with the World economies...testing how far and how much they can get away with!!!

[mhr]

1. It Seems That That Pesky Peak Oil Problem Is Rearing Its Ugly Head

eom

[arcos]

3. yup, and they are STILL denying it...

This will be ugly.

[whistle]

2. Okay, Russian UCOS oil production is at a standstill, Venezuela

...has had its production fall back, Saudi oil has peaked, Iraq is experiencing disruptions on a daily basis, Iran can turn off its oil any time, the oil fields around Indonesia and Sumatra were disrupted by the earthquakes. Where will all of the increased production come from? Shouldn't we be cutting back on consumption?

[VirginiaDem]

4. The Saudis do not want $70 per barrel oil...

so they will talk the other OPEC nations into ramping up their production (if the Saudis can't do it themselves). High oil prices lead to significant reductions in consumption and this threatens the Saudis with their large reserves. Assuming of course that the Saudis are not lying or mistaken about the extent of their reserves...

[arcos]

5. There can't be many reductions in consumption...

Last year prices went up 40% and consumption grew. China desperately needs oil, and obviously Saudis and all other oil producing countries want higher prices.

[VirginiaDem]

11. Actually, that's wrong past a point...

The Saudis are considered oil "doves". They do NOT want very high prices. They want moderately high prices at most. It seems counterintuitive but it is true. If it weren't for the Saudis, prices would much more often be through the roof.

The reason is the Saudi reserves. Because they are huge, they have a lot more oil in the ground that would become worthless were the bottom to fall out on oil prices. The only way for the bottom to fall out on oil prices is for consumption to be reduced massively. This would happen if alternatives became viable (which they eventually will, one way or another). Research and resources devoted to alternatives go up when the price of oil gets too high. This has happened in the past.

This explains the contentious OPEC meetings--the Saudis (and a few others) against, especially, the Iranians. The Iranians don't want to help the Americans and they want very high oil prices because their proven reserves are much lower than the Saudis--they would manage to pump all of their oil before alternatives every kicked in to gear so they have less to lose than the Saudis.

You're right about the current consumption growth and the China factor makes this interesting but the Japans, EUs and even United States of the world have a point where they will invest more and more in alternatives to OPEC oil.

[Massacure]

6. The Saudis aren't the only peopled that lied about reserves though.

[lovuian]

7. All I know its been a great year for the Saudis financially

and devastating for America

and I keep remembering Michael Moores movie!!!

and How Saudia Arabia booted our troops out of their country with no reprisals from Bush!!!

[Massacure]

8. Ya, will all the OPEC members are benefiting from China's oil demand.

Plus Iraq has been cut out somewhat, which takes on that "terror premium."

[FloridaPat]

9. Last time they increased production, it was sour oil. Not as good or

easy to use as sweet oil.

To stop the prices going up so much, all they have to do it go on Euro's for oil sales. The dollar is falling because of the incompetency of Bushco and the national debt. If they switch to Euros, the dollar can fall and the price of oil for everyone else will stay the same. We'll get killed.

And why are the Saudis trying to save the dollar and the US?

[VirginiaDem]

12. Good point...

about the Euro and I didn't know that about the quality of oil. Is your last question rhetorical? If not, see my post no. 11 above.

[Centered]

10. Inflated Prices

What oil company was it (perhaps even all of them) that was on the news a month or so ago boasting "Record Profits"?? That is disgusting IMHO

I don't have a problem with a company making money... but abusing your customer base simply because you can is really sad. Just because OPEC sells oil at "X" dollars per barrel doesn't mean you are doing the customers a favor by selling it at "X - 2" dollars (especially when profits are that obscene) Anyone happen to have an idea of how much oil is left over there in the Middle East? 20 years? 50?? (I really do want to know so please post if you know a link)

I wonder how bad the prices will get the closer to depletion.

Perhaps someone could make something like the X Prize for an effective alternate fuel (which is abundant everywhere) vehicle that doesn't use oil and still performs like an internal combustion engine.

I don't think this even needs to be an environmental issue I think both parties would agree that if we as a nation could eliminate our dependency on OPEC our nation would be more secure financially and otherwise by not empowering potential unfriendly governments. (potential is used very loosely here)


Centered