A date that will live in infamy.
Posted on 06/08/2011 9:49:23 AM PDT by thackney
Members of the Organization of Petroleum Exporting Countries did not reach a new agreement on oil production quotas at Wednesday's meeting in Vienna.
Oil prices rebounded in New York and London after the news. Oil prices had been declining in anticipation that OPEC members might work out a deal to boost production. The OPEC nations pump about 40 percent of the world's oil, and the organization's quotas officially limited members to producing a bit less than 25 million barrels a day.
Some OPEC members have said the international energy markets are well-supplied with oil, and blame high prices on "speculation" rather than tight supplies.
Other OPEC members have expressed concern that high oil prices might spark "demand destruction," which could hurt oil producers if high prices prompt customers to sharply conserve energy or switch to alternative sources of fuel.
OPEC unexpectedly keeps lid on oil production *updated*
http://fuelfix.com/blog/2011/06/08/opec-likely-to-increase-oil-production/
OPEC officials said the lack of agreement meant that OPEC will maintain present output ceilings with the option of meeting within the next three months for a possible production hike.
“We are unable to reach consensus to … raise our production,” OPEC Secretary General Abdullah Al-Badri told reporters, in comments reflecting unusual tensions in the 12-nation Organization of the Petroleum Exporting Countries.
Analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks
In other words, Iran and Venezuela called for higher prices to support their socialist ‘freebies’ that are used to buy their population’s loyalty and Saudi Arabia called for more production.
And all the rest of the countries didn’t care either way.
A date that will live in infamy.
Four Gulf Arab countries - Saudi, the UAE, Kuwait and Qatar - had proposed an increment of 1.5m bpd over Opec’s 28.8m bpd current production including Iraq, for overall output of 30.3m bpd. They are worried about the impact of a high oil price on economic growth.
Libya, Algeria, Angola, Ecuador, Venezuela, Iraq and Iran wanted to keep production unchanged.
My suggestion--which I know would never come to pass, but we can dream can't we?--would be that any country which belongs to OPEC would be immediately cut off from any foreign aid.
Secondly, any country who belongs to OPEC and for whom we provide any military defense (our good "buds"--NOT--The Saudis come to mind) we would charge them thru the nose for said protection.
If they balked or refused, then fine. Let them seek same protection from China, some EU Country or even Russia and see how long they last.
“...OPEC’s four Gulf Arab countries proposed the 12-member group increase output by 1.5 million barrels a day to 30.3 million barrels a day, including Iraq which is not bound by an OPEC quota.
Seven — Libya, Algeria, Angola, Ecuador, Venezuela, Iraq and Iran — were opposed...”
http://finance.yahoo.com/news/OPEC-oil-talks-collapse-no-rb-3639573786.html?x=0
This was a political, not an economic, decision. Amusingly, the “no” cartel, dominated by US enemies, are doing this because they believe it hurts Obama’s chances of reelection - and it does. Little do they appreciate that Obama is the best friend these America-hating regimes will ever have in the WH.
http://blogs.wsj.com/marketbeat/2011/06/08/opec-keeps-oil-production-unchanged/
“This is one of the worst meetings we ever had in OPEC,” Saudi oil minister Ali Naimi told reporters after the meeting. “We were not able to reach an agreement.”
OPEC’s Secretary General said there is no oil coming out of Libya right now, crimping supplies and helping keep oil prices high.
Adding to the weirdness, Iran’s oil minister says Iran might call for an “extraordinary” OPEC meeting at some point.
We could always drill our own?
I know! That’s totally just the booze talking!
I’ll just show my self out.
And if OPEC replied with "no oil", what then?
About 40% of our imported oil comes from OPEC.
What we need to do is raise our domestic production. We need to quit believing wildlife sanctuaries take precedence over national security.
This effectively marks the end of Saudi dominance over OPEC.
This, if events follow through and there’s no reversal on these positions by the member states, is a BIG turning point for OPEC.
For the past year and a half, a number of OPEC ministers have ben claiming that $100 per barrel is the right price for oil. Since then the rebellions in the Middle East have forced many of those governments to increase social spending. I suspect that they need the higher oil prices to pay for that social spending (to mollify their people). That might be why some nations don't want to see prices go down.
There is potentially bad news in this situation if higher commodities prices (food) drive up the cost to deliver the new social programs to the masses in those Middle East countries. That would mean that just about the only way for them to raise more money to pay for those programs would be to support higher oil prices.
There is only one way to take on OPEC...and that is to significantly increase our own production...and reduce our imports. That means, 'Drill Baby Drill!!!'. Nothing else will have an impact on the oil market.
I still maintain that the US, Canada, Australia, Argentina/Chile, and a few other countries create a “food cartel” in return. Virtually no OPEC country is even close to feeding itself.
Let’s see who lasts longer with high prices. I would give them weeks to months.
Correct. Ignore OPEC and attack the problem where WE have a say. Depending on the tender mercies of OPEC or others, whether through beseeching, bribing or threatening, is a fool’s game.
Some of the OPEC players will start cheating when the price hits their targets. That’s not our preferred method of increasing supply, but it will happen. As usual with the Obama administration, the stated policies are at odds with the actions taken by the administration. Got a jobs problem? Got an oil price problem? Let’s inhibit production that would lower prices and create jobs. It’s a double whammy on us, and a double win for the environmental-socialist coalition in their quest to destroy capitalism.
This might be the time to try it! Right now there is a drought in China that will reduce this year’s wheat yield. If it were a normal year, China could use a lot of its wheat surplus to drive down the price of that commodity, but this year there probably won’t be a wheat surplus in China. Therefore wheat prices should continue to go up.
Correct. Ignore OPEC and attack the problem where WE have a say. Depending on the tender mercies of OPEC or others, whether through beseeching, bribing or threatening, is a fool’s game.
Some of the OPEC players will start cheating when the price hits their targets. That’s not our preferred method of increasing supply, but it will happen. As usual with the Obama administration, the stated policies are at odds with the actions taken by the administration. Got a jobs problem? Got an oil price problem? Let’s inhibit production that would lower prices and create jobs. It’s a double whammy on us, and a double win for the environmental-socialist coalition in their quest to destroy capitalism.
LOL
Get set for the chorus of moralists who argue that food should never be a weapon... and that it is also immoral to convert corn into ethanol.
I get such a kick out of those people.
Those countries couldn’t increase production enough to make a noticeable price difference anyway.
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