OPEC says FACK YOU-- do they even want to stabalize the world?

[thesightless]

all time record in cut of production coming from OPEC

2.2 million barrells being taken out of prodcution. i guess 40 dollars a barrell isnt funnelling money into the sheiks and "charitable organizations" anymore. so they are gonna do thier best to piss off the outsid world in an attempt to drive up prices again.

so what happens if (and i hope this has happened already) everyone catches on and we just dont buy above where we are? do they hold oil hostage?

[day_for_night]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

sorry sean, hate to disagree with you, but oil companies world wide are in just as much trouble as everyone else.

the problem is that with oil at $40 alot of marginal projects are getting shelved. if we don't get oil back up into the $60-$70 range, where these projects are profitable, then we are shooting ourselves in the feet. supply, long term, is obviously constrained. the concern is that with the credit crunch and low oil, that we won't be replacing supply fast enough over the 3-5 year time horizon. if we don't, shit will really hit the fan in a few years when all these delayed projects materialize in the form of *drastically* lower supply. thats when the doomsdayers will be right about $250 oil. and its not something that would be easily fixed....you don't just start up a project in 6 months. it takes years.

OPEC only represents about 40% of the world supply now, and they are doing their best to keep things stable. I actually respect what they're doing here...they're thinking long-term when its so very tempting to think short-term.

[Miroslav]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

sorry sean, hate to disagree with you, but oil companies world wide are in just as much trouble as everyone else.

the problem is that with oil at $40 alot of marginal projects are getting shelved. if we don't get oil back up into the $60-$70 range, where these projects are profitable, then we are shooting ourselves in the feet. supply, long term, is obviously constrained. the concern is that with the credit crunch and low oil, that we won't be replacing supply fast enough over the 3-5 year time horizon. if we don't, shit will really hit the fan in a few years when all these delayed projects materialize in the form of *drastically* lower supply. thats when the doomsdayers will be right about $250 oil. and its not something that would be easily fixed....you don't just start up a project in 6 months. it takes years.

+1,000 Well said.

The average person is out there thinking that the whole oil crunch stuff is dead and buried...not so at all. While oil prices may have been unsustainably high back at their peak, they may also now be at unsustainably low levels now. Sooner or later, we'll get out of this recession and demand projections will grow again and supply won't...and oil prices will whiplash upwards again FAST.

OPEC only represents about 40% of the world supply now, and they are doing their best to keep things stable. I actually respect what they're doing here...they're thinking long-term when its so very tempting to think short-term.

I dunno that their thought process is that noble, but I see your point... It seems to me that right now, the long term and the short term interests happen to be aligned for them.

[day_for_night]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

I dunno that their thought process is that noble, but I see your point... It seems to me that right now, the long term and the short term interests happen to be aligned for them.

don't get me wrong, a large part of that is self interest...they know if oil is too high or too low, its bad for them. just so happens though, that now their interests and ours are actually aligned...

[Kamal]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

That "claim" of cutting production may not be enforced

"They're wondering whether OPEC can enforce this cut," because the budgets of many OPEC nations are already stretched incredibly thin, said Nimit Khamar, analyst with Sucden Financial in London.

http://money.cnn.com/2008/12/18/markets/oil/index.htm

[Miroslav]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

Oil falls below $38 - OPEC cut ignored

http://money.cnn.com/2008/12/18/markets/oil/index.htm?cnn=yes

[day_for_night]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

well, the cuts never have an immediate effect. the price is only affected once the cuts materialize into lower supply...of which there is a glut right now. give it 6 months to a year and you'll see a change (assuming they actually go through with it).

[Kamal]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

imo, even if they do go with it, the $5/gallon scare has a good majority of the working class spooked. The demand for more gas-sipping autos has never been as high as it is today and having seen gas prices soar like that has ensured everyone will believe they could very well return.

with almost every auto manufacturer now trying to beat the 30+ mpg barrier, clearly, demand WILL curtail. The big question is if it will curb enough to match the cut in production, more, or less. But I do believe that if prices do increase as a result of this cut, whenever they do, it may not be as damaging as this recent increase.

[Miroslav]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

imo, even if they do go with it, the $5/gallon scare has a good majority of the working class spooked. The demand for more gas-sipping autos has never been as high as it is today and having seen gas prices soar like that has ensured everyone will believe they could very well return.

with almost every auto manufacturer now trying to beat the 30+ mpg barrier, clearly, demand WILL curtail. The big question is if it will curb enough to match the cut in production, more, or less. But I do believe that if prices do increase as a result of this cut, whenever they do, it may not be as damaging as this recent increase.

see I'm actually not that optimistic, because I feel that people as a collective are pretty dumb have short attention spans (Exhibit A: subprime mortgages; Exhibit B: 2008 global recession) - and this is especially the case when it comes to things that require them to change their current habits that they like. They always look for an excuse to avoid it, and low gas prices are always the ultimate excuse. Maybe it will be different under Obama, but government regulation stadnards have proven to be a very poor way of dealing with this in the past.

I also think that demand is falling now not really because of anything the auto manufacturers are doing, but because of the broad recession that the world is in right now. And when things are as bad as they are now, people overreact to the gloom and bid down asset and commodity values to unnaturally low levels (just like they overbid everything like morons a few years back)...

...until suddenly one day everyone wakes up and recognizes that oil was oversold, that the lazy Americans haven't really given up their wasteful gas-guzzling ways, and that the global supply-demand dynamics have not fundamentally changed from what they were before. And then we will watch prices quickly climb to over $100 a barrel again.

[madmrmojo]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

This is all cyclical. Gas prices will be back up in a years time.

[thesightless]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

i cannot disagree more with certain opinions here

i cant will myself to write a long post, but first and foremost, considering everything going on, we need the supply opened up and cheap. from industrial capacity to basics, we need to get back into creating jobs and making things easier and cheaper in order to put the wheels back on the bus by creating demands than create jobs.

so much more, but willpower isnt here.

[runningman]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

OPEC are a bunch of crooks and should be put in jail.

[Miroslav]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

i cannot disagree more with certain opinions here

i cant will myself to write a long post, but first and foremost, considering everything going on, we need the supply opened up and cheap. from industrial capacity to basics, we need to get back into creating jobs and making things easier and cheaper in order to put the wheels back on the bus by creating demands than create jobs.

so much more, but willpower isnt here.

well, I agree that jobs need to be created - and hopefully Obama will make this a quick top priority when he takes office.

As far as things being cheaper...well, I have some good news and some bad news for you.

Good news: things are getting cheaper and they will probably continue to get cheaper. There is evidence that we may be headed towards an environment of broad, sustained deflation. There will be lots of good deals out there!

Bad news: things are getting cheaper because everyone feels overextended and uncertain about jobs, and they aren't spending. And as prices fall, three things will happen: (1) cash-strapped people will continue to defer spending as they wait for things to get increasingly cheaper, (2) businesses of all kinds will earn less money and will be forced to further downsize their staff, who will then join the ranks of cash-strapped people who defer spending, and (3) businesses will defer investment (assuming they even have access to necessary financing) as various capital projects will now essentially be NPV negative. It's a vicious consumer-led cycle that really tanks an economy.

Moral of the story: certain assets are grossly overvalued and need to come back down to sane levels in order for the economic healing to begin (see: home values), but when prices come down too quickly in certain asset classes, they tend to spread out of control into other areas...and that is a very bad thing.

[ddr]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

OPEC are a bunch of crooks and should be put in jail.

im surprised you arent raging the lines yelling out for an OPEC bailout in all honesty.

[runningman]

Re: OPEC says FACK YOU-- do they even want to stabalize the world?

OPEC bailout??

I don't get it.

Do you mean because I think that the big three should get a LOAN to preserve millions of jobs when Paulson is handing Trillions to bankers by buying TOXIC ASSETS (which basically means SHIT) that I in some way would want to bailout everyone now?? I wasn't for bailing out anybody in the beginning, but when I realized that this was a modern day bank robbery I was bailouts everywhere. Here is a guy who knows more on the topic.

[YOUTUBE]http://www.youtube.com/watch?v=w84EiCt0Lqk&eurl=http://www.infowars.com/?p=6658[/YOUTUBE]