The end of OPEC?

[Sheldon]

http://blogs.moneycentral.msn.com/to...h-of-opec.aspx

The death of OPEC

Saudi Arabia walked out on OPEC yesterday, saying it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.
As the world's largest crude exporter, the kingdom in the desert took its ball and went home.
As the Saudis left the building, the message was shockingly clear. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate told the New York Times. “We will see what the market requires and we will not leave a customer without oil."
OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude was due to "oversupply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the U.S. and European Union for a time. That political battle is only at its beginning.
The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. The breadth of that deposit has now expanded.
OPEC needs the Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member, it forfeits its leverage.
OPEC has made no announcement about any possibility of dissolving, but the process is already over.

[Red Hat]

That's great if they continue to meet demands and ignore OPEC. If some of the other members join the Saudis then just maybe it will fold OPEC.

Another good article on this.

http://www.nytimes.com/2008/09/11/bu...=2&oref=slogin

[NDS]

OPEC has actually lasted a good long time for a cartel. Most collapse within just a few years.

It would be nice to finally see the end of this one.

[kwo51]

Yes a good place for a clay more

[tattedupboy]

This is good news indeed. While I studied economics in college, I learned that while cartels (such as OPEC) do indeed have the ability to manipulate prices, one disadvantage of them is that individual members can be tempted to "cheat," as Saudi Arabia is doing here, and thus, they tend not to be stable. I had also figured that one or more OPEC members would eventually get greedy and attempt to ignore production quotas, but I had no idea it would be this soon. Maybe now, oil prices will be determined by the market, and not by this illegal cartel.

[Red Hat]

Actually the speculators drove prices up. Something the cartel has been trying to do for years. Once the prices were up the cartel cut production trying to maintain the higher price. Once the price drops a little more it should stabilize. If congress puts some leashes on the speculators it should stay at that price for a while.

[tattedupboy]

Originally Posted by Red Hat

Actually the speculators drove prices up. Something the cartel has been trying to do for years. Once the prices were up the cartel cut production trying to maintain the higher price. Once the price drops a little more it should stabilize. If congress puts some leashes on the speculators it should stay at that price for a while.

While speculators are indeed drawing much disdain from the public, they aren't pushing the prices up. Yes, they're cashing in big time from the price increases, but blaming them for the high prices is like blaming a thermometer for temperatures being too high or low.

[Sheldon]

Originally Posted by tattedupboy

While speculators are indeed drawing much disdain from the public, they aren't pushing the prices up. Yes, they're cashing in big time from the price increases, but blaming them for the high prices is like blaming a thermometer for temperatures being too high or low.

Wrong if crude were not not on the commodities market then the Price would still be in the $50 mark. OPEC is delighted that they are driving the cost. See bellow for more good news...

GOOGLE it or follow this link. It will blow your mind. USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)

The U.S. Geological Service issued a report in April ('08) that only scientists and oilmen knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota; western South Dakota; and extreme eastern Montana ... check THIS out:

The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.

'When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.' says Terry Johnson, the Montana Legislature's financial analyst.

'This sizable find is now the highest-producing onshore oil field found in the past 56 years,' reports The Pittsburgh Post Gazette. It's a formation known as the Williston Basin, but is more commonly referred to as the 'Bakken.' And it stretches from Northern Montana, through North Dakota and into Canada. For years, U.S.oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough ha s opened up the Bakken's massive reserves... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!

That's enough crude to fully fuel the American economy for 41 years straight.

2. [And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO, people!]

U.S.Oil Discovery- Largest Reserve in the World!
Stansberry Report Onli ne - 4/20/2006 Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction.

They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth. Here are the official estimates:

-8-times as much oil as Saudi Arabia
-18-times as much oil a s Iraq
-21-times as much oil as Kuwait
-22-times as much oil as Iran
-500-times as much oil as Yemen- and it's all right here in the Western United States.

HOW can this BE? HOW can we NOT BE extracting this!? Because the democrats,environmentalists and left wing republicans have blocked all efforts to help America become independent of foreign oil.

James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels. Untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.

[tattedupboy]

Originally Posted by Sheldon

Wrong if crude were not not on the commodities market then the Price would still be in the $50 mark. OPEC is delighted that they are driving the cost. See bellow for more good news...

Have you ever thought that rather than the price of oil being caused by speculation, that instead the increase in speculation is caused by the increase in the price of oil? That's what's happening. Just like I said before, to believe that speculation caused oil prices to increase is like believing that thermometers are to blame for temperatures that are too hot or too cold. Speculators respond to the market, but they don't control oil prices.

[Sheldon]

Originally Posted by tattedupboy

Have you ever thought that rather than the price of oil being caused by speculation, that instead the increase in speculation is caused by the increase in the price of oil? That's what's happening. Just like I said before, to believe that speculation caused oil prices to increase is like believing that thermometers are to blame for temperatures that are too hot or too cold. Speculators respond to the market, but they don't control oil prices.

Oil speculation is a real bad idea, you in essence create a middle man, it's kind of like adding bureaucracy to the government.

Just imagine if ammo were sold to a commodities broker first what kind of mess it would be. Some bozo buys the future production of Winchester the store shelf are full and the stuff is on sale for $12.00 a box, then Winchester has a labor contract coming up and the says white box should be worth $35.00 a box due to possible supply issues, so when they sell the ammo in the store they get to pay his price if they want any more, golly wouldn't that be fun? Yes that is a simplified annology

Oil is no different, it is placed on a commodities market, they pump it, then the price of the commodities is driven my people that listen to rumors, and bid upon those fallacy's.

Years ago oil was not a commodity, supplies flowed to the refineries without a problem, prices were very reasonable, there were no problems and then they made it a commodity, sugar, coca co, beans, corn are fine examples of a commodity but not oil.

Commodities are funds used to raise capital on something you do not have yet and the oil Rich countries need the extra cash like I need to weigh 50 more pounds. I repeat it should not be a commodity and any who drive the cost are A*******