Hugo Chavez says oil should not fall below $60 a barrel

[Freddie Stubbs]

Caracas.– Venezuelan President Hugo Chavez said on Tuesday the price of oil should not fall below $60 a barrel, two days after the OPEC country cut its production to stem price declines.

Oil has tumbled more than 20 percent from peak levels of close to $78 per barrel in July, sparking concerns among some producer nations of a prolonged slump in oil prices.

Chavez said he had ordered Venezuela's cut of 50,000 barrels per day because oil prices had fallen to $65 a barrel, in an apparent reference to world crude prices – as opposed to Venezuela's own cheaper crude.

"The price of a barrel of oil today should not fall below 60 dollars. That is a fair price," he said in a speech promoting Venezuelan scientific programs.

more: http://www.dominicantoday.com/app/article.aspx?id=18239

[Selatius]

1. The House of Saud cut oil prices to help Bush's allies in Congress

WASHINGTON (Reuters) - Saudi Arabia's ambassador to the United States, Prince Bandar bin Sultan, promised President Bush the Saudis would cut oil prices before November to ensure the U.S. economy is strong on election day, journalist Bob Woodward said in a television interview Sunday.

http://www.forbes.com/home/newswire/2004/04/18/rtr1335645.html

[skids]

2. Good memory you have there.

In fact, I think this blast from the past deserves it's own thread.

(BTW, to be clear this was for the 04 elections)

[bluestateguy]

3. Screw that

I appreciate him trying to help poor Americans by selling them cheap oil, but working people are the ones who pay the price when oil prices are high.

[philb]

4. don't know about anyone else but

i am a little bit more comfortable with the petroleum exchanges determining oil prices......

i just can't seem to be able to get on the Hugo bandwagon

[phantom power]

5. I think what Hugo is trying to say is...

that $60/barrel(+) represents the new reality, in terms of remaining oil deposits, increasing world demand, etc. Artificially forcing it below that mark is unsustainable, and unrealistic. It will only send a false message to people about what the true state of the world's oil economy is. He is trying to be responsible, in terms of keeping the market representative of reality. The exact opposite of how American politicians prefer to manage the economy, in other words.

[Show_Me _The_Truth]

8. Actually

he is only expressing an opinion of what it should be.

The price should be at what the market is willing to sell it for and what consumers are willing to pay for it. Does that ever happen, NO. Whether its tin-horn Hugo, the House of Saud, or whoever, the market is manipulated by the OPEC consortium by adjusting run rates.

Gas prices, that's another story, thats the consortium of ExxonMobile, Chevron, Citgo, etc. Lower oil prices just take the steam out of their excuse that oil is causing high gas prices.

[RaleighNCDUer]

16. "The Market" is not rational. When you have unlimited resources,

as was the seeming situation when the idea of market controls was created, it made sense - balance labor against exploitable resources and demand, and prices will find their natural level, like water.

But we are entering an age of finite resources. First oil, next water, and without controls those resources will disappear to everyones' detriment. Look at Easter Island. For hundreds of years they chopped away at their forests, until there were no more trees at all, whereupon the society collapsed due to the loss of an irreplaceable resource and they were reduced to internecine warfare and cannibalism.

The market is not the solution. Sometimes, it is the problem.

[AngryAmish]

31. Except that Easter Island may not have happened that way

In sum, the population of Easter Island may never have been over 3,000.

"Newly introduced diseases, conflict with European invaders and enslavement followed over the next century and a half, and these were the chief causes of the collapse. In the early 1860s, more than a thousand Rapanui were taken from the island as slaves, and by the late 1870s the number of native islanders numbered only around 100. In 1888, the island was annexed by Chile. It remains part of that country today."

[davidinalameda]

56. when he has the power to control output

it's more than just more than simply expressing an opinion

and I like "tin-horn Hugo"

need to remember that and use it

:hi:

[RaleighNCDUer]

14. What you said.

As it is, a dozen or so men in charge of the richest corporations in the world are manipulating the prices to their own benefit, regardless on the end result on the general economy, world supplies, or international politics.

[pampango]

22. Wonder if Hugo has an opinion on the maximum "realistic"

price for oil, or does he just have a view on the minimum realistic price. Perhaps he has stated this minimum price in the past and I missed it.

After all if he is factoring in the new reality, in terms of remaining oil deposits, increasing world demand, etc. into the minimum price, I hope that his factoring in the health of the world economy, the burden on oil importing developing countries, etc. into his calculation of the maximum "realistic" price - say $65/barrel(-). I would hope that I will hear from him, the next time that world events or some oil panic drives the market price way up and he offers to increase production, because the price is "unrealistic."

Otherwise, one should be forgiven for believing that he simply wants to sell his country's natural resource for more rather than less.

[phantom power]

24. What is the "realistic" price of a resource that is disappearing?

If 10 people are in the desert, two weeks from the nearest water well, with 10 gallons of water between them, what is the price of that water?

[pampango]

28. You are right. The market wouldn't work very well in that situation.

In the case of supply of and demand for millions of barrels oil produced and consumed every day, the market seems to be able to handle the pricing. If you are saying that some wise entity (Hugo, the UN, you, me?) should be charged with determining a "disappearing (nonrenewable) resource" tax on top of the market price, good luck.

The argument could be made that the market already prices this "tax" into the price, just like the price of the 10 gallons of water in your desert scenario. The price of that water would be very high as a finite resource, but would drop to about zero if our 10 intrepid explorers stumbled upon an oasis in the desert. My guess is that consumers are already willing to pay more for a barrel of oil, because it is viewed as a finite resource, than they would if it suddenly became an inexhaustible resource.

Back to Hugo, I don't have access to the formula he used to determine a "realistic" minimum price for a barrel of oil. Perhaps his formula also indicates a maximum "realistic" price for oil, as well. If not, Hugo might just want more money for Venezuela's oil, just like he might want to sell his 10 gallons of water for the most he can get.

[phantom power]

34. I'm not holding my breath, but something like that...

is probably exactly what I would propose. I probably would not propose a tax, so much as a price-management program. If that sounds rather like communism, I guess it is, although it would be applied to certain critical resources, not to the entire economy.

As you say, nothing like that will happen, regardless. The current market system will limp along, growing gradually more destabilized as decreasing oil supplies make the market ever more sensitive to any supply disruption (real or imagined), no matter how small.

At some point, oil producing countries will most likely simply stop exporting oil, at which point oil-importing countries like the US will either take it by force, implode economically, or quite possibly both.

The poor will starve. The formerly non-poor will become poor, and many of them will starve. Odds are reasonable that me and my family will be among them, since most will. Some enclaves of civilization will probably survive, maybe as city-states clustered around whatever areas of earth remain habitable after the current climate breakdown reaches whatever new equilibrium awaits us.

FYI, I don't actually view the above scenario as the only possible outcome, but all the less-gloomy outcomes are contingent on massive international efforts at migrating to a post-oil and GHG-neutral economy. Almost nothing like that is actually happening. Certainly not nearly enough to actually avoid catastrophe.

[Chemical Bill]

30. It's hard to get a straight quote...

when the translator can make it seem like Chavez is gloating. Correct me if I'm wrong, but I assume he delivered the speech in spanish, and our media can make it seem like he said whatever they want.

Bill

[pampango]

33. My choice is to ignore what is said in the rest of the world

that doesn't speak English or rely on someone to translate it for me. If his remarks were mistranslated I hope that someone will post the correct translation.

I choose not to ignore what the rest of the world says.

[Phx_Dem]

46. There is virtually no price point

that makes oil a sustainable energy source. Chavez needs to protect his petrodollars for his social programs, so he is letting us know that he will continue to reduce production so crude oil prices remain artificially high.

[pampango]

47. That kind of plain talking will keep you from ever

being a successful politician.

[GliderGuider]

54. Can I take issue with two words?

The words are "virtually", and "artificially"

The reason I take issue with "virtually" is that there is no circumstance whatever, within the time scale of human civilization, that oil can be considered a sustainable energy source. As far as we are concerned, it's a finite, unreplenishable resource. Any rate of use use is unsustainable no matter what the price is. Even at $10,000 a barrel, if we continue to use it, it will run out before it can be replenished by mother nature. Oil can never be a sustainable resource - especially given that we have used half of all there was in just the last 100 years.

My objection to the word "artificially" is different. it implies that there is some kind ot "natural" price for oil. But given that oil production is the result of human effort, any price for it is artificial. The price was held at a low level for years by OPEC ensuring there was enough supply to satisfy the demand at the lower price. That price of $10 was just as artificial as this one of $60. To use the word "artificial" in this context implies a value judgement on the actions of the producers. What is really meant by the phrase "artificially high" is really "higher than the consumers would like", just as when the price was "artificially low" we really meant it was lower than the producers would prefer.

[Phx_Dem]

55. I used virtually

because I try to avoid being unequivocal. I realize that the price would have to be awfully high for oil to be a sustainable resource. Hypothetically speaking though, there is a price that would allow oil to be sustainable but I have no idea how high that price would have to be or the time frame involved.

Regardless how we define "artificial" oil producers can and do affect the supply curve by either over producing or under-producing, especially in the short term. If producers did not manipulate output, the eventual price of gas would reflect the "natural" point of equilibrium between supply and demand.

[GliderGuider]

58. What's your definition of sustainability?

You may have a different understanding of it than I do. My definition is that for a resource to be sustainable the rate of use can be no greater than the natural rate of replenishment. I don't see how oil can be considered sustainable under that definition, so you must be using a different one?

I guess I could accept the use of the word artificial if we're talking about someone setting production rates with the sole aim of achieving a particular price, rather than taking into account just the more general issues of discretionary production capacity and demand volume, and then letting the price fall where it may. In reality I think most production decisions factor in all of these issues. Unless production is physically constrained, a producer has to decide where to draw the line, and that will be an economic decision based on how he thinks his actions will influence the market price.

Frankly I find the notion of "demand" to be a very slippery idea.

[Phx_Dem]

62. No point in quibbling

your correct, oil is not generally considered a sustainable resource. What is the rate of replenishment? I have no idea, but for oil to be sustainable obviously consumption would have to be less than this, which is sort of in the realm of possibilities. ;)

[GliderGuider]

63. Fair enough

Sorry, I get all grumpy and curmudgeonly when I start thinking about TEOTWAWKI.

[dysfunctional press]

53. $60/bbl is not a high price.

and american workers are not the rightful owners of the world's oil supply.

[Phx_Dem]

57. So says you

the poster that you are replying to pointed out that high fuel prices affect poor Americans the most. You disagree?

[dysfunctional press]

59. i disagree that $60/bbl is a high price for oil.

i don't disagree that poor americans are affected the most in THIS country by high fuel prices- but the opec nations aren't to blame for that- the uu.s. economic/social system has a whole lot more to do with it.
regardless, the u.s. can't expect to go on consuming 25% of the earth's resources for 5% of the earth's population.
and btw- the american "poor" are by and large MUCH better off than the rest of the world's "poor"...a lot of the people who might be considered poor here, don't really know what "poor" really is.

[Phx_Dem]

60. The US also accounts for 28% of the worlds GDP

So it's reasonable imo for the US to use 25% of the worlds resources. I agree with you about country comparisons of poverty--the poor in the US are significantly better off than the poor in other cos.

[Nihil]

64. Have you any idea how your post reads to a non-American?

I think I know what you were trying to say but ...

> The US also accounts for 28% of the worlds GDP
> So it's reasonable imo for the US to use 25% of the worlds resources.

... sounds so arrogant and ignorant!

I accept that you as an individual may well know the truth but
that argument just reinforces the "ugly American" image instead.

There is no acknowledgement of how that 25% of the world's resources
are obtained (e.g., how much by exploitation, bullying and simple
theft vs by fair trade?), none of the source of that 28% GDP
(e.g., mainly by polluting industries and the arms trade) and only
the smug "shit, we deserve it" attitude used as "justification".

The unfortunate thing is that this sort of argument is largely used
by genuinely arrogant, ignorant people who believe in their "right"
to do what they want, when they want it and take any questioning as
a major affront to their "patriotism".

[Phx_Dem]

67. I think you are reading too much into my stmt

I think a global policy of conservation of resources is vital, Americans in particular do use a great deal of energy per capita compared to other countries, but that in and of itself is not surprising given the enormous amount of goods and services we produce.

Funny that you bring up fair trade, because the lack of fair trade hurts both US workers and foreign workers, while the people who benefit are primarily foreign companies and owners. I personally support US tariffs for imports that originate in countries like China and Mexico due to the absence of worker protections and decent wages. Without some semblance of a level playing field, US workers' earnings will continue to erode, and the economy will continue to suffer in the long term.

I suspect that very little of the US GDP derives from "polluting industries" given that we have pretty good environmental laws in this country (at least when the republicans are out of power).

[dysfunctional press]

66. wow. another one that just doesn't get it...

and probably wonders why the rest of the world holds us in disdain(if we're lucky)...

[ShockediSay]

6. Hugo, it's just the oil lobby trying to get their Repugs elected

Prices will shoot up after the election

[RaleighNCDUer]

21. I think that's what he's trying to tell us. nt

[w4rma]

7. I don't like it, but he is correct. Prices are being artificially lowered.

For the elections by the Saudis and primarily the oil refineries and big oil who are taking a smaller percentage than they were before the recent retail price drop.

[jseankil]

25. Well consider these facts...

Weak Hurricain season

Israel/leb conflict complete

Iran tensions have cooled

U.S. economy cooled.

Summer driving season completed.

All reason why oil has dropped, this is a fact.

That said, oil prices were artificially higher than they should have been.

[pampango]

29. Would you please stop interjecting economic facts into this

discussion? What is more fun to read about - supply and demand fluctuations OR conspiracy theories?

If a hurricane suddenly start heading for the Gulf, the price of oil will go up. If the Middle East flares up again, the price will go up. If the US economy heats up (not under Bush), the price will up. The summer driving season won't come back for a while, but maybe severely cold weather strikes the Northeast and Midwest this winter, and the price of oil will go up.

My theory is that Bush is controlling the hurricane season (through the cooperation of that guy, El Nino.) He has mandated a temporary peace in the Middle East. He has intentionally cooled off the US economy, though allowing the stock market to rise to hide this fact. Doesn't that sound more interesting than some dry recitation of supply and demand factors?

[jseankil]

32. hehe. Much more interesting. You Volunteering Oct 7th for Ohio elections?

Via an email....

...Now, we need you once again to help elect Sherrod Brown to the United States Senate as he seeks to defeat incumbent Mike DeWine, a rubber stamp for Bush and the Republican leaders in Congress. We need you to elect strong candidates like John Cranley (OH-01), Richard Siferd (OH-04), Charlie Wilson (OH-06), Bob Shamansky (OH-12), Betty Sutton (OH-13), Mary Jo Kilroy (OH-15), and Zack Space (OH-18) to Congress. And we need you to elect Democrats up and down the ticket to turn around Ohio and fight back against Karl Rove and his Republican attack machine.

You can get involved this weekend, on Saturday, October 7, across the state, in places like Middletown and Medina, Cleveland and Cambridge, as Ohio Democrats make 100,000 Calls for Victory, a historic voter outreach initiative just one month before the election. Or, if this weekend doesn't work for you, you can sign up to help another time.

Can you possibly volunteer on October 7 or at any other time between now and election day to help the Ohio Democratic Party and your Democratic candidates?

[razors edge]

9. Venezuelan crude is heavy crude

costs more to extract and not profitable for him below about 35/barrel.

[madrchsod]

10. oil should be at the price of 60-65

to cover the rising costs of labor,exploration,and materials . that is what the floor is going to be from now on and the world consumers will have to adjust.

[onenote]

20. did costs double in two years?

I thought crude was still in the $30/barrel range as late as 2004. Did the cost of labor, etc. double in just two years?

[phantom power]

23. that model of market pricing is incomplete.

although the classic model of a market economy is something like "price = labor + materials + profit-margin," the true way that market economies work is more complicated, and much less rational. It's one of the fundamental disconnects that the GOP exploits to convince people their policies make sense. But I digress.

As you say, labor and materials required for oil-extraction did not suddenly double since 2004, but some other things did happen:

1) the demand for oil from Asia is growing at double-digit rates each year, and so the market dynamic has recently "flipped" from a buyer's market to a seller's market, and we all know that pricing undergoes a nonlinear shift upward when that happens, which has nothing to do with the cost of producing "X," in this case oil. The housing bubble is another example of this. We all know that the actual cost of building homes has increased far more slowly than actual home prices, over the last 10 years. And now, as the bubble is deflating, the price of homes is dropping, independently of what it costs to build one. Oil prices are obeying the same "seller's market" dynamic.

2) Geopolitical instability is making oil-supplies hard to predict. Will total war erupt in the middle east? It's a possibility, in which case the world supply of oil is likely to drop suddenly. So people purchasing oil futures are trying to accomodate that unknown into their pricing contracts, which certainly raises the price.

3) Nobody will admit publicly it yet, but these people all surely are starting to realize that we are passing The Peak. Light sweet crude is already getting harder to come by, and knowing this causes upward pressure on prices.

[Bacchus39]

11. revenue shrinking Hugo??

n/t

[CountAllVotes]

12. that's what I was thinking

:nopity: for any of these greed monger oil men and Hugo is one of them, do not forget that!

Today's prices: Crude Oil 58.43 -0.25

Oh well ...

:dem:

[SammyWinstonJack]

13. !

:evilgrin:

[enigmacat]

18. LOL You are hilarious! Not.

Blanket statement with no evidence about his motives.

[jseankil]

89. Pay attention, it was a question not a statement, and a mighty fair one

at that.

[onenote]

15. weren't crude prices in the $20-$30 range during the 1990s?

[RaleighNCDUer]

17. That was before peak oil. nt

[Name removed]

19. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[killbotfactory]

26. Don't worry, the price will shoot up when we bomb Iran

you only have to wait until after the election.

[Freddie Stubbs]

44. It was predicted in 2004 that we would bomb Iran BEFORE the election

Now it is after the 2006 election.

[pampango]

45. Conspiracy theories evolve, dude. n/t

[Freddie Stubbs]

48. Especially when they turn out to be wrong

[pampango]

49. You want to start a prediction that if the bombing of Iran

doesn't start after the 2006 election, it will come before the 2008 election. We can save the prediction of bombing after the 2008 election for November of that year. Thank God, Bush is an idiot. He invaded Iraq in April 2003 - not right before or after any election.

[Psephos]

27. Thanks for nothing, douchebag

Not so long ago he was saying it should be no more than $50. There was a time when the number that came from his mouth was $35.

The world's poor countries pay the same price for oil as the rich. So who does $60 oil hurt the most?

Chavez has got the same petrodollar jones as the rest of his OPEC pals (Iran is a key example). They ratchet up spending in lockstep with rising prices, then face major social problems when government spending must be cut as prices fall.

Peace.

[ret5hd]

35. "...he was saying it should be no more than $50" Not true!

He was offering to "lock in" a $50 price for his heavy oil (which trades at a discount to the more desirable "light" oils)

[Psephos]

43. Sorry, Chavez is on record explicitly stating what I said

"$50 a barrel - that's a fair price, not a high price." That's Chavez, talking about the long-term benchmark price for OPEC oil (not just Venezuelan heavy oil). Seems pretty clear to me.

That's from April of this year, btw. Read it for yourself.

http://www.fool.com/news/commentary/2006/commentary06040503.htm

Also, you omitted to mention that this $50 OPEC target price is a huge increase from what the previous OPEC target price. Chavez was trying to strong-arm OPEC into raising its official benchmark price by almost double.

Fair, of course, is a word everyone interprets differently. My interpretation is that $50 per barrel is unfair to poor people and poor countries...but a windfall for Chavez and other oil-rich countries.

Chavez has been threatening cutbacks in production lately to maintain artificially high prices. Typical cartel behavior. I see no difference between the market manipulations of the oil baron Chavez and the other oil barons of the world. They play hardball with other people's economic health without much concern for the suffering their manipulations create.

Peace.

[rinsd]

36. I thought $50 a barrel was a fair price, but I guess that was bullshit

[PeaceProgProsp]

38. That's when the dollar was stronger. $60 today = $50 2.5 yrs ago

[killbotfactory]

39. And he wanted the price to be within a defined range

within a defined price band.

[rinsd]

40. Except he made that statement in April of this year, not 2 1/2 years ago

http://business.guardian.co.uk/story/0,,1745467,00.html

[PeaceProgProsp]

51. On April 3, dollar was 1.74 vs pound. Today, it's 1.88.

Do the math. The value of the dollar accounts for more that 50% the $10 difference between Chavez's statement then and now.

And the other 50% can be attributed to the fact that he was talking about Venezuelan crude in one case, which is cheaper than the oil other countries produce, and, according to the article in the OP, the $60 price possibly didn't apply to the the price Venezuelan crude.

[rinsd]

52. Yeah because Chavez was taking into account inflation

:eyes:

Talk about grasping at straws. Oh and the proper conversion rate if you're gonna go down that road would be the Euro, not the pound. The Euro v Dollar was a 1.22 avg in April and has risen to 1.27 for Sept/Oct.

"And the other 50% can be attributed to the fact that he was talking about Venezuelan crude in one case, which is cheaper than the oil other countries produce, and, according to the article in the OP, the $60 price possibly didn't apply to the the price Venezuelan crude"

Venezuelan crude is not cheaper than other countries, where do you get that factoid? Are you conflating Chavez's offer for cheap oil for the poor with the actual cost of his oil?

[PeaceProgProsp]

61. That information is from the article in the OP.

[rinsd]

69. The article also says he said $50 3 days ago.

[PeaceProgProsp]

83. And you asked:

"Venezuelan crude is not cheaper than other countries, where do you get that factoid?"

Is your question answered?

[Say_What]

37. OLD NEWS. He's been saying this for a year or more... n/t

[BlueEyedSon]

41. Damn, low oil prices could hurt emerging biodiesel and ethanol co's

[Pavulon]

42. The artificial communista dream world will

come spinning apart. No oil money from us, he is in deep shit.

Can't keep the big promises without the oil dollars from the evil empire..

[GliderGuider]

50. A number of countries have "reluctantly" announced production cuts

Their stated reason is to protect the price of oil. That would be a good thing, since it's the only significant natural resource many of these countries have. Conserving it and getting the best price for it is only sensible. Unfortunately, in the opinion of many watchers their stated reasons are bullshit. What we suspect is happening is that they are trying to disguise physical production limitations as voluntary cutbacks so as not to panic the world about the state of the oil supply.

What's happening with oil prices is exactly what one would expect in a tight market. Prices get bid up very high because of a combination of supply limitations and fear factors. The high price suppresses demand, resulting in a temporary glut. This oversupply condition causes prices to drop. After a while the lower prices stimulate demand again. The new demand causes the prices to rise. The market then stabilizes for a while until a new round of growth-driven bidding drives the price up to a new high and the cycle repeats all over again.

We will see more and more of these cycles over the coming years. The problem is that we used to be able to count on Saudi Arabia, Venezuela and others to act as "swing producers" - they were able to open the taps when prices got too high, thereby causing an artificial glut to drive prices back down and stabilize them. What's happening now is that there is almost no excess production capacity left in the world - we're using about as much oil as can physically be produced. This means that the only way for a glut to appear on the market is to suppress demand, and that requires quite high prices due to the well known demand inelasticity of oil (i.e. it takes a big move in prices to affect demand a little). Because we now only have only one mechanism (demand destruction) instead of two (demand destruction and supply increase) available to control the supply/demand balance and the resulting price, we will see much more price volatility in the oil market from now on.

This has nothing to do with being being "played" by oil exporting nations. They are as much victims of this situation as importers like the USA are. This is a sign of the impending geologically-mediated peak in global oil production.

[Judi Lynn]

65. It's a joy seeing a post from someone who knows what he's talking about!

It's always far more convincing than mere opinion based on hot air and ignorance.

[NeedleCast]

68. Can't Buy As Many Russian Weapon Platforms

When oil prices are down.

[Renew Deal]

70. And there you have it.

We need to get off oil. This country is being held hostage OPEC and it's members.

[Judi Lynn]

71. Sounds like a perfect time to start improving mileage in cars, just

as they were asked earlier.

[Spinoza]

72. Of course, the rich don't give

a shit if oil is $100, $60 or $30 (which it was only 3-1/2 years ago). But the middle class and the poor of the world genuinely suffer with high oil prices while Chavez can roll in his billions, yuck it up with Holocaust Deniers, and make pious speeches about the poor. Talk about hypocricy. Oh wise and mighty leader, if you really want to help the average laborer, the man or woman who has to carefully budget every dollar (in whatever currency) they spend, then increase oil production, and let the price of oil fall! Stop raking in billions while human beings suffer.

[GliderGuider]

73. What makes you think he could raise production if he wanted to?

Venezuela's production has been in decline for the last eight years. Don't you think Hugo would have opened the taps by now if he could? No matter how much you dislike the man, neither Hugo nor King Canute can command a depleting oil field to yield up riches it can't provide.

[Flanker]

74. Venezuela can and has plans to raise production to 5.8mmbd

Chavez is worrying about Venezuelans, and he does give discounts of sorts to neighbors and the poor. Think of it as progressive taxation, 60 dollars for the rich and say 50 for the poor, who sometimes sell thatoil at 60$ for a small revenue.

[GliderGuider]

75. Venezuelan production is currently about 3 mbpd

Any talk about doubling it is the same kind of pie in the sky as the assumptions that Canada can ramp up its oil sands output from 1 to 5 mbpd in 10 years. All Hugo has to play with is Orinoco heavy, which is essentially the same kind of tar that comes out of oil sand. There is not a chance he can double production.

[Spinoza]

78. But the rich person, anywhere in the world,

who fills up his Mercedes doesn't even look at, or care about, the pump price. He's not being hurt. On the other hand, the millions around the world who can barely afford to keep their 10 year old Datuns running are getting killed with every increase in crude. (And, of course, the price of oil effects many other commodities and services besides gasoline.) Even if one accepts the argument that higher oil prices are benefiting the poor of Venezuela, there can be no doubt that the (much, much) larger number of poor who live in non oil exporting countries, are hurt when Chavez cuts production to raise oil prices. Chavez is hurting the poor of the world, not helping them. Progressives who really care about the worlds poor, and want them to have better lives, should not be cheering this man.

[Nihil]

87. Wake up!

Point #1: The "World"(i.e., the USA) should wake up to the fact that oil
is going to hit it's peak within our lifetimes (some studies have it hitting
a few years ago, even the most GOP-oriented ones admit it will hit soon).

Point #2: The rich person is going to be the last to feel *ANY* problem
be it fuel, food or space. Accept it.

Point #3: Chavez is simply doing his best in the situation. This might
not be ideal by your point of view but tought shit ... it is the best
option that he has.

(BTW, the word is "Datsun")

[Spinoza]

77. Good point.

Of course, you are completely correct in respect to Venezuela's ability to increase production. (Apparently, Venezuela's production problems are not due only to depleting fields, but also incompetent misuse of existing facilities.) But my point remains that in his efforts to raise the current price of oil, by cutting Venezuelan production, Chavez is not hurting the rich one bit while he is actively harming the poor and middle classes. In particular the poor and middle classes of other countries who are not receiving any of the generous Chavez 'largese'. So he can keep the billions rolling in to his (personally controlled) treasury, buy off the Venezuelan 'campesinos', control the press and political dissenters thru intimidation and threats, and massively build up Venezuelan armed forces. We've seen this story in S. America before. His name was Peron.

[Name removed]

79. Deleted message

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[Name removed]

82. Deleted message

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[GliderGuider]

81. This doesn't sound like it's about oil

so much as it's about a dislike of Hugo the man and his politics. KSA has also announced a "voluntary" production cut to maintain prices, and I don't see anyone shaking their fists and castigating them for hurting the poor of the world. In addition, Hugo's ability to affect world prices on his own is miniscule - Venezuela has a total of just 4% of the world's production.

Oil prices are just a convenient stick to beat the South American boogey-man with.

[greccogirl]

76. Thanks Hugo. We appreciate it. NOT

[Nihil]

80. Fine. Whinge at your own government, not theirs.

You've been ruled by the oil industry for years ... why have a go at
someone else flexing their muscles?

[Psephos]

85. So it's ok when their robber barons do it, but not ours.

Ok. That makes sense.

Not.

Peace.

[Name removed]

86. Deleted message

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[0rganism]

84. Not to worry, it'll be back at $70+ by Christmas

and once again, the industry analysts will be shocked and amazed at the sudden twist of fortune.

Any correspondence in timing to the November elections is complete coincidence, of course.

[Buchananfan]

88. Shows again that his interests are the exact opposite of ours

Expensive oil = Threat to the American way of life