I think it is already being reported on Bloomberg that it is a done deal, to protect their credibility they will go ahead with the already proposed cut.
This has to be the most over-hyped story I have heard in a long time. OPEC production at this time of year means absolutely nothing to the price on the world market for oil. The pricing will all be about future expectations come June and July. OPEC and non-OPEC members will all be cheating their asses off as long as the price stays this high, there will be no "shortage". For that reason I highly doubt the price on commodities markets will move much on this news. I think most traders have already priced this in as judged by today's move up.
This has to be the most over-hyped story I have heard in a long time. OPEC production at this time of year means absolutely nothing to the price on the world market for oil. The pricing will all be about future expectations come June and July. OPEC and non-OPEC members will all be cheating their asses off as long as the price stays this high, there will be no "shortage". For that reason I highly doubt the price on commodities markets will move much on this news. I think most traders have already priced this in as judged by today's move up.
I wonder if anyone would venture a guess at how much oil would go for a barrel if we invaded Saudi Arabia? My personal guess...$120/barrel with potential for even higher costs. That kind of move would seize up the world oil markets and many governments would just start saying "please citizens, don't drive your cars for awhile as we sort this all out". That move would cut off more than half the world's oil supply in an instant because just about all of OPEC would shut off their taps in reaction to that.
ye... today they cut.. 1million barrels per day...
i remember i posted this 3 weeks ago...
but some stupid said... that the stock market were lowering the prices.. now they're increasing the oil price...
http://therxforum.com/6/ubb.x?a=tpc&s=100090022&f=9103084407&m=391108321&r=915108321#915108321
i remember i posted this 3 weeks ago...
but some stupid said... that the stock market were lowering the prices.. now they're increasing the oil price...
http://therxforum.com/6/ubb.x?a=tpc&s=100090022&f=9103084407&m=391108321&r=915108321#915108321
Guys, OPEC is not tooling with production and prices in order to be cute, they are doing it because they work with US dollars and the US dollar is shit right now for value. How record oil prices can suprise anyone when the dollar is at record lows is a mystery to me.
OPEC nations are collectively holding tens if not hundreds of billions of US dollars, which have depreciated in value by a wide margin since Snow took over the Treasury Department. OPEC had two choices: stop using the dollar and switch to another currency, or up the prices. We should be glad that they don't just go the former route, because if they did it would sink the dollar like the Titanic.
Regarding the ever-amusing KMAN's comments on Saudi Arabia, this piece might be interesting. I was just about to post it up anyway.
Phaedrus
OPEC nations are collectively holding tens if not hundreds of billions of US dollars, which have depreciated in value by a wide margin since Snow took over the Treasury Department. OPEC had two choices: stop using the dollar and switch to another currency, or up the prices. We should be glad that they don't just go the former route, because if they did it would sink the dollar like the Titanic.
Regarding the ever-amusing KMAN's comments on Saudi Arabia, this piece might be interesting. I was just about to post it up anyway.
Phaedrus
Interesting piece P.
I would counter that the the Israel/Palestine F-up is very closely related to the West (+especially the US) Interfering and meddling in the middle east.
Most of it, if not all of it, I regard as our personal responsibility, and a total f***-up that needs fixed as much as is possible.
(I realise that a partial, but fair solution is the best we can do, but even this is still an extremely long way off)
Whereas the other stuff is mainly the Arab dudes just beating the shit out of each other and trying to f-each other over and haggle, which is their business, and what they have always done with each other.
I reckon there is a lot of disquiet in the arab world over this 'greater middle east' plan that the US is going to kindly and caringly apply to the entire region, with or without their approval.
A united front needs to be displayed before its too late, and that's a tough call.
I would counter that the the Israel/Palestine F-up is very closely related to the West (+especially the US) Interfering and meddling in the middle east.
Most of it, if not all of it, I regard as our personal responsibility, and a total f***-up that needs fixed as much as is possible.
(I realise that a partial, but fair solution is the best we can do, but even this is still an extremely long way off)
Whereas the other stuff is mainly the Arab dudes just beating the shit out of each other and trying to f-each other over and haggle, which is their business, and what they have always done with each other.
I reckon there is a lot of disquiet in the arab world over this 'greater middle east' plan that the US is going to kindly and caringly apply to the entire region, with or without their approval.
A united front needs to be displayed before its too late, and that's a tough call.
What's really going to be interesting is when there is an outright hostile division between the Arab nations. Too many in the West see the Middle East as a single, homogenous culture workin against us, when in act there are massively diverse factiosn withi nthe Middle East working against one another as they flesh through various interpretations of strategies when it comes to the U.S. and other G8 nations -- they want our business, they want the power that comes from OPEC, etc.
Tunisia is a major wild card in this scenario, as are Bahrain and the UAE. Any one of these three nations could easily support itself without the help or grace of the other Arab nations, and if they broke with the traditional myth of the "united front" all hell would break loose in the Middle East, on a scale that makes current and recent conflicts there look like an SCA jousting tournament.
Dubai (UAE) is probably heading for trouble within the decade anyway, since they are proving 99% of what is said in the typical Arabic culture to be bullshit. Dubai is like paradise on earth compared to most of the rest of the Middle East, and has the distinction of being the only place in the region where tube tops and burkhas are equally prevalent. Synagogues, mosques and catherdrals all cluster around one another, bars are easily accessible, etc. and society is getting along just fine -- which throws all of the typical radical rheotoric into the fan, and not in the way that we do it in the States, but right there in their own back yard.
I love Dubai. I wish they'd get cracking on some online gaming legislation and turn themselves into a gambling haven; that would be beautiful.
Phaedrus
Tunisia is a major wild card in this scenario, as are Bahrain and the UAE. Any one of these three nations could easily support itself without the help or grace of the other Arab nations, and if they broke with the traditional myth of the "united front" all hell would break loose in the Middle East, on a scale that makes current and recent conflicts there look like an SCA jousting tournament.
Dubai (UAE) is probably heading for trouble within the decade anyway, since they are proving 99% of what is said in the typical Arabic culture to be bullshit. Dubai is like paradise on earth compared to most of the rest of the Middle East, and has the distinction of being the only place in the region where tube tops and burkhas are equally prevalent. Synagogues, mosques and catherdrals all cluster around one another, bars are easily accessible, etc. and society is getting along just fine -- which throws all of the typical radical rheotoric into the fan, and not in the way that we do it in the States, but right there in their own back yard.
I love Dubai. I wish they'd get cracking on some online gaming legislation and turn themselves into a gambling haven; that would be beautiful.
Phaedrus
What is really going on is the media is hyping it up into a frenzy. CNN ran a silly ass poll and the sucker people ate it up. They asked something along the lines of (not sure the exact way the question was asked): do you believe the rise in gas prices is causing significant financial hardship? With all the media hype they convinced almost half the people to say yes. Come on, now really. I mean we all hate to spend money on gas when we could think of many other better ways to spend it, but you figure that the increase in gas costs since say Fall has probably affected the average person $10-20 a month, depending on where they live and how much they drive. I will say this, if you are really finding financial hardship because you have to spend say $20/month extra, gas prices aren't the least of your worries. I worry for your budgeting skills and common sense. Those that are paying much more than that a month almost always got themselves into their own fix buying a big SUV or living way out in the suburbs. Sure there are occasional cases of true hardship, but 50% of the people??? They have to be kidding me. Kind of reminds me of the dumb comment I saw in some weekly rag, they asked a similar question and some college kid said "yeah it is killing me, I spend all my paycheck on gas now". Really? What did you spend 75% on it before??? The media and the emotional people of this country, driven in part by our lousy politicians are making this into some big deal when it really isn't anything serious. It doesn't matter much unless people in positions of power start making irrational decisions based upon it, much like what KMAN said.
That is what worries me quite a bit. All these people who are fretting and all the media types should go and consult some oil market experts, or hell just me, the guy who used to do work with the numbers in an econ related function years ago. Phaedrus is on the right track with the dollar issue, but beyond that there is just a ton of uncertainty built into the market because of so many speculators are playing the price momentum. Add to that Russia and Iraq being two very uncertain players in the near future as to how much oil they will put into the system. It is so uncertain in fact that I think most economists would just say ignore what OPEC says and just count the barrels when it is all said and done. OPEC is doing this very seat of the pants right now, but the only way to cover themselves is to play it tight, even if they really aren't following through on it.
That is what worries me quite a bit. All these people who are fretting and all the media types should go and consult some oil market experts, or hell just me, the guy who used to do work with the numbers in an econ related function years ago. Phaedrus is on the right track with the dollar issue, but beyond that there is just a ton of uncertainty built into the market because of so many speculators are playing the price momentum. Add to that Russia and Iraq being two very uncertain players in the near future as to how much oil they will put into the system. It is so uncertain in fact that I think most economists would just say ignore what OPEC says and just count the barrels when it is all said and done. OPEC is doing this very seat of the pants right now, but the only way to cover themselves is to play it tight, even if they really aren't following through on it.
I happened upon an interesting piece by James Turk that explores the oil price hikes in the context of my above arguments regarding the weak dollar ...
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
OPEC Has Already Turned to the Euro
As the dollar's rate of exchange continues to fall against the world's major currencies, there has been much speculation about the likely knock-on effect. One area receiving a lot of attention is crude oil in general, and OPEC in particular.
It has been suggested that OPEC may begin pricing crude oil in terms of the euro, and further, that OPEC may actually begin invoicing its crude oil exports in terms of euros. This latter step would require shifting out of dollars, with OPEC receiving euros in payment.
These possibilities have been scoffed at by many whose interests are tied to the fate of the dollar, but it seems that OPEC has already taken the first step - it appears to be pricing crude oil in terms of the euro. This conclusion is apparent from the following table. The import data is from the Department of Commerce report entitled U.S. International Trade in Goods and Services. The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
US Imports of Crude oil
Year
(1)2001
(2)2002
(3)2003
Quantity (thousands of barrels)
(1)3,471,066
(2)3,418,021
(3)3,673,596
Value (thousands of US dollars)
(1)74,292,894
(2)77,283,329
(3)99,094,675
Unit price (US dollars)
(1)21.40
(2)22.61
(3)26.97
Average daily US$ per € exchange rate
(1)0.8952
(2)0.9454
(3)1.1321
Unit price (euros)
(1)23.91
(2)23.92
(3)23.82
<HR></BLOCKQUOTE>
<HR></BLOCKQUOTE>
Article continued here.
Phaedrus
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
OPEC Has Already Turned to the Euro
As the dollar's rate of exchange continues to fall against the world's major currencies, there has been much speculation about the likely knock-on effect. One area receiving a lot of attention is crude oil in general, and OPEC in particular.
It has been suggested that OPEC may begin pricing crude oil in terms of the euro, and further, that OPEC may actually begin invoicing its crude oil exports in terms of euros. This latter step would require shifting out of dollars, with OPEC receiving euros in payment.
These possibilities have been scoffed at by many whose interests are tied to the fate of the dollar, but it seems that OPEC has already taken the first step - it appears to be pricing crude oil in terms of the euro. This conclusion is apparent from the following table. The import data is from the Department of Commerce report entitled U.S. International Trade in Goods and Services. The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
US Imports of Crude oil
Year
(1)2001
(2)2002
(3)2003
Quantity (thousands of barrels)
(1)3,471,066
(2)3,418,021
(3)3,673,596
Value (thousands of US dollars)
(1)74,292,894
(2)77,283,329
(3)99,094,675
Unit price (US dollars)
(1)21.40
(2)22.61
(3)26.97
Average daily US$ per € exchange rate
(1)0.8952
(2)0.9454
(3)1.1321
Unit price (euros)
(1)23.91
(2)23.92
(3)23.82
<HR></BLOCKQUOTE>
<HR></BLOCKQUOTE>
Article continued here.
Phaedrus
But of course, W. claims that it's because of the rejection of his 2001 energy package, and Kerry says it's because of ... well ... not really sure what it is he's trying to say; something about OPEC needing to be pressured and Dick Cheney being a former energy industry executive (REALLY, John? I did not know that! Cheny in the energy industry -- first I'd heard of it.)
(story here.)
Phaedrus
(story here.)
Phaedrus
Stupid question! Will the Arab nations cut oil?
If they do, then we will have a reason to go in and kill all the arabs and muslims and use them for crude oil.If it really does happen,then we need shut off their oxygen.
Boy those arab countries would look good with Americans running the new land.
For all you ARAB lovers, what is so good about these puppets?
Cut oil? They can cut the oil, then we would have a great reason to round up the MUSLIM people and export them to the state of Montana.Once they are boxed up to Montana, then we can put a big metal fence around it, and drop falafels from the helicopters once a day.
I have never ever met any nice ARABS. They are all phonies,liars,different,mentally disturbed,useless,smelly,and are worthless!
If they do, then we will have a reason to go in and kill all the arabs and muslims and use them for crude oil.If it really does happen,then we need shut off their oxygen.
Boy those arab countries would look good with Americans running the new land.
For all you ARAB lovers, what is so good about these puppets?
Cut oil? They can cut the oil, then we would have a great reason to round up the MUSLIM people and export them to the state of Montana.Once they are boxed up to Montana, then we can put a big metal fence around it, and drop falafels from the helicopters once a day.
I have never ever met any nice ARABS. They are all phonies,liars,different,mentally disturbed,useless,smelly,and are worthless!
Man your hate for them equals the hate of most extremists for the West. Get real, oil decisions are BUSINESS and business should never be personal. They have cut oil supply at this point of the year in almost every year over the last 10. Oil supply cuts in spring are about as sure as the change in the weather.
Degenerate
Never heard of such a thing, but never did any flirting while I was there. it would be sort of hard to imagine, given that the population there is about 80% imported -- so even if you're hitting on a "local" chances are she's from somewhere else.
There may be social stigma attached to Muslim natives who become involved with non-Muslim immigrants, but I imagine that that is universal in Muslim countries and that the backlash is a lot lighter in Dubai than in, say, Saudi Arabia.
Phaedrus
Never heard of such a thing, but never did any flirting while I was there. it would be sort of hard to imagine, given that the population there is about 80% imported -- so even if you're hitting on a "local" chances are she's from somewhere else.
There may be social stigma attached to Muslim natives who become involved with non-Muslim immigrants, but I imagine that that is universal in Muslim countries and that the backlash is a lot lighter in Dubai than in, say, Saudi Arabia.
Phaedrus
