OPEC delegate says oil price rise "not justified by market fundamentals"

[bigtree]

DUBAI (Reuters) - OPEC believes oil prices are too steep, after setting a fresh record high above $70 a barrel, and the rise is not justified by market fundamentals, a senior OPEC delegate said on Tuesday.

The delegate said there was no shortage of crude oil supply and that OPEC giant Saudi Arabia and other producers had pledged in the past to keep markets well supplied.

"OPEC believes strongly that prices are too high and nobody wants to see these prices," the delegate told Reuters. "(But) it has nothing to do with fundamentals."

"Geopolitics are riding the price," the OPEC delegate said, stressing that there was no shortage of crude in the market.

Saudi Arabia has the lion's share of OPEC's spare capacity. Riyadh has repeatedly said there is not enough demand from refiners for the medium and heavy crudes that constitute the bulk of its unused output capacity.

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-18T091354Z_01_L18203482_RTRIDST_0_BUSINESSPRO-ENERGY-OPEC-DELEGATE-DC.XML


lot of folks tried to explain away the higher prices as a sign of the 'Peak oil" decline in reserves.

I say it's pure manipulation, stoked by Bush's sabre rattling. That's what the visible evidence shows.


my 2 cents:

Sticking It To Us at the Gas Pump Because of the Iran 'Crisis'

http://www.opednews.com/articles/opedne_ron_full_060414_sticking_it_to_us_at.htm

[babylonsister]

1. I wonder if dimson realizes this is one of the premier issues

that will probably sink him? He's blatantly sticking it to the American people, messing with their bottom dollars which are already few and far between for many. It's hard for me to believe he doesn't have a clue, but easy for me to believe he just doesn't give a damn.

[bigtree]

2. I think they benefit from an impovrished working-class

the rich have enough money to sustain them at their position on the pyramid. All that they have to do is keep piling as many of us as they can at the bottom to elevate them.

[babylonsister]

3. Are you Ron and did you write that article?

It's excellent and I'm sending it to my SO in particular. He works for an airline; high gas prices have negative effects all over the industry, and there doesn't appear to be an end in sight.
I'm so disheartened by every aspect of what this admin is doing to sink America. :(

[bigtree]

7. yup, thanks.

it's the first grasp of my obsession with this oil price issue. I wish I could get more folks questioning the effect of Bush's militarism on the recent price bubble.

It's all too convienient for the oligarchy and their foreign counterparts to keep the price high. OPEC says they want $50 a barrel (still too high), the IEA said yesterday that they want OPEC to increase production to curb the price rise. As far as I know, no one in the industry is claiming that they've come to a 'peak' in thair supply. Senior industry sources say the refinery issue shouldn't be holding up the price.

But, what foreign sources are beginning to admit, the U.S. militarism and the prospect of an Iran invasion are what's allowing the speculation in the stock market, and allowing the price of oil to float even higher.

The problem is that the foreign industries keep a close hold on data which would help determine who is telling the truth about all of the activity. That leaves us to speculate. I'll wager for the worst of motivations from both the industry and their enablers in government. We are being had.

[babylonsister]

8. So all the sabre-rattling is pretty much what is driving

the prices up by speculators, and any attempts at diplomacy could drive prices down. I know that's simplistic, but that's what is driving me batty. It's a calculated move by this admin and I'm sure they're aware of the consequences.
Sigh.
Nice to meet you, bigtree, and I've always admired your writing style!

[bigtree]

9. likewise, babylonsister

I'm always eager to scan your posts when I see your handle on a thread.

You're spot on about the diplomacy, real diplomacy, not the PR for Bush's militarism we have now. :hi:

[schmuls]

5. But remember, he doesn't watch tv, probably doesn't read much

either, so he lives in a fantasy world. His minions only tell him things he wants to hear, so he is unaware of how rising gas prices are affecting what people think of him. I think even if he did watch the media, and look at polls, he still wouldn't care!

[SammyWinstonJack]

17. What is clear, is that he doesn't give a rat's ass how rising gas prices

affect working class Americans, whether he "knows" or not. I guarantee he knows how rising gas prices affect his and his base, The Elites' bottom line. pResident CEO is well aware of the record Oil Companies' profits from increased gas prices.

[acmejack]

4. Why doesn't that surprise me?

Something elese to be mad about. I hope I can ask Feingold about this tonight.

Shoot, Sister, if you have an SO in the airline biz, you ought to get yourself up to Austin & join us tonight for Russ Feingold and a lot of other good stuff.

See this:http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=180x30585#30588 It's the Bluegrass Roots Event.

[babylonsister]

6. Sounds like a blast, acmejack.

I won't be able to make it but hope you give us a blow-by-blow of how the evening goes. And I hope you get to speak to Sen. Feingold! Let him know how angry we are out here, and we want representation (though I think he's got the message:))! :thumbsup:

[The2ndWheel]

10. If it's all manipulation

and "nobody wants to see these prices", couldn't they just be saying whatever they have to in an attempt to keep prices from going even higher?

Hopefully Bush is the anti-Christ, can control geology, and we(industrialized world, India, China, etc) can all snort that fine line of oil off the table, because our lives depend on it.

[bigtree]

11. of course, you're right

it's all a manipulation. Oil could be at a 'peak' and on the decline. They could be covering up a dire shortage and folding under 'demand'.

But, I think this OPEC official is expressing a frustration with the inflated price and his reluctance to put the pedal down on production, only to have some breakthrough on Iran pop the bubble. I think OPEC could encourage an increase in production - and may do just that soon - but there is a growing belief and acknowledgement that the U.S. meddling and militarism is pushing the price of oil through the ceiling.

[bigtree]

12. "I don't believe there's a shortage in the market" says Qatar oil minister

OPEC can't stop price rise

Monday, April 03, 2006

OPEC, which pumps 40 percent of the world's oil, is unable to stop crude prices from reaching US$70 (HK$546) a barrel as geopolitical crises in member states Nigeria, Iraq and Iran are driving up oil prices, Qatar's oil minister said.

"We are doing all we can to meet demand but prices are rising because of Iran, Nigeria and Iraq," Abdullah bin Hamad al-Attiyah said Sunday in Doha, Qatar.

"Even if prices reach US$70 a barrel, what can OPEC do?"

"International economies can absorb US$60 oil," said the oil minister of Qatar. "I don't believe there's a shortage in the market as more than one million barrels a day are going into inventories," al-Attiyah said.

http://www.thestandard.com.hk/news_detail.asp?we_cat=10&art_id=15694&sid=7342802&con_type=1&d_str=20060403

[Strelnikov_]

13. Sorry, Don't Agree. What We Are Seeing Is Geopolitics Overlayed

on the peak or near peak of global oil production.

I say it's pure manipulation, stoked by Bush's sabre rattling. That's what the visible evidence shows.

Maybe the 'visible evidence', but the actual evidence indicates a different reality.

There have always been geopolitical threats to the oil supply. So, why the rise now?

Because there is no spare capacity, unlike in the 90's. Nearly every possible barrel that can be pumped is being consumed.

Why has worldwide capacity been flat for the last year and a half, in spite of sustained (and increasing) high oil prices for the last four years? I mean, if they made money in the late 90's, why is supply not increasing massively as all the economists tell us it should? Four years to increase supply?

Why does OPEC, on one day, say prices are too high, then the next day note there will be no increase in production? Why is OPEC, even now, in the face of record prices, not even meeting it's quota?

My read, we are at the worldwide "The Texas Railroad Commission announced a 100 percent allowable for next month." moment.

Report: OPEC Production Fell In March

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=49844

[bigtree]

15. I think they know producers are enjoying the increased earnings.

Also, they seem to be acknowledging that production can't do a thing about the 'unrest' that is fueling the negative speculation and the rise in the barrel price.

I remember that OPEC in 2005 made all kinds of moves to get countries to reduce inventories and slow demand to curb the return of the downward trend in the price of a barrel (it was about $28 at the time).

It worked, but the militarism has driven the price higher that what they had said was their preference, $50-$60 a barrel.

The theory of peak oil can be instructive for the future and the prospect should encourage us all to do what we can to use less, but I don't think that's the reason for the high prices now. Neither, I suspect, do the producers.

[Strelnikov_]

18. Again, I Disagree. If There Was Spare Capacity Available

whoever held said capacity would be flooding the market.

OPEC members didn't hold to quota's when oil was in the 20's, so why would they now?

The price runup is due to capacity nearly matching desire (demand). High prices over the last 4+ years have not yielded enough of a supply increase to offset depletion in the super-giants.

Peak oil, the depletion of (thermodynamically) cheap oil is the cause.

[Roland99]

14. Well.......*DUH*!!!!!

[bigtree]

16. Bush Concerned About Rising Gas Prices

President Bush says a variety of global forces are to blame for crude-oil prices topping $70 a barrel.

do we believe him?

"There is tight supply worldwide, and we have got increasing demand from countries like India and China, which means that, any disruption in supply, or perceived disruption of supply, is going to cause the price of crude to go up, and that affects the price of gasoline," he said.

The president says prices are also up on increasing domestic demand, as Americans are driving more, now that the cold winter weather is ending, and because states are switching their fuel-mix to a warmer-weather blend.

"The combination of these creates higher gasoline prices, and I am concerned about higher gasoline prices. I am concerned about what it means for working families and small business, and I am also mindful that the government has the responsibility to make sure that we watch very carefully, and investigate possible price-gouging, and we will do just that," added President Bush.

http://www.voanews.com/english/2006-04-18-voa66.cfm