Posted on 12/12/2004 9:16:21 PM PST by jb6
By David Winning, PA City Staff
Oil cartel Opec agreed today to scale back production in a bid to defend high prices and protect revenues.
At a meeting in Cairo, Saudi oil minister Ali Naimi said the total reduction of one million barrels a day will be implemented from the beginning of January.
Opec also agreed to meet again at the end of that month to review the impact of the cutback on prices, which have fallen sharply recently since hitting a new record in October.
Mild weather in the United States has led to a stronger than expected build-up in oil stocks across the Atlantic and Mr Al Naimi suggested prices may continue to fall.
We have done everything to moderate the price, the Saudi minister said, alluding to overproduction in recent months. It is moderating and it will probably moderate more.
Todays decision means output will be scaled back to Opecs quota of 27 million barrels a day.
Despite some pressure by other Opec nations to raise the bar on Opecs price band now at between 22 US dollars to 28 US dollars Mr Al Naimi said the group decided to leave that marker unchanged for now.
But he suggested the 11-nation oil cartel could decide on further cutbacks even before crude prices fall below those levels.
We will defend (market) stability by going up or going down, he said.
The cut in production had been widely expected after Opec oil ministers publicly offered their support to such a move.
Kuwaits Sheikh Ahmad Fahad Al-Ahmad Al-Sabah had estimated Opecs overproduction at about 1.7 million barrels a day, although other ministers have put it at 1.1 million barrels.
The Opec meeting highlighted members concern about a possible oil glut in the second quarter of 2005 and prices that are now a quarter below their peaks above 55 US dollars a barrel.
With the US dollar at record lows against major currencies such as the euro, Opec nations were worried about the impact on their revenues from falling prices.
However, consuming nations have called on Opec to keep output high to underpin economic recovery.
Opecs production total reaches more than 30 million barrels a day once Iraq is included. Iraq, which produces about 2 million barrels a day, has been exempted from quotas to enable it to rebuild its economy. s
...So is suggesting that evil oil companies are somehow extorting money from the consumer in an open market.
They provide a product that people want, restricted by that SAME DAMN CONSUMER that voted for all the conflicting EPA recipes for different smog locales, etc, as I think you are rightly alluding to.
My point is that the same folks that bitch about the oil companies are the ones that let government make gas production more expensive---and they're the SAME ONES that demand lower oil prices from OPEC that automatically force domestic production to drop.
People want lower prices and more domestic production and less profit for the oil company and more regulation by the government. God bless any company that tries to satisfy that customer.
You are exactly right in terms of SA oil being a sour crude - However, where cutting SA oil production is having an effect is on the Trading market - (and that to a larger extent than in the past is having real-time and current effect at the pump price) -
This is way SPR should have been either opened or at the very least stop being filled by the GWB Administration way back in April - (it would put a call into all the oil traders.....with how traders are playing today...I am certain it would drop a barrel of oil under $38).
Time for a real Energy Bill! No more of these Can Recycling Bills the Rats are always proposing, smaller Eurocars and Mess Transit, time for real energy planning to free us from the ME!
Pray for W and Our Troops
Send me whatever quote you want! What will that prove? You can also send me a note when a stamp costs $1 for a postcard! So what? If a company charges you too much, don't do business with them. Don't run off and complain to nannystate.
While you are 100% correct about the fools you mention above....that is in NO way the majority of Americans...and an even lesser extent of all the small-business owners out there!! -
Secondly, it is not just the oil companies making money off of oil!! - Not at all!! - Traders are having a larger impact on prices than ever before -
You seem too concerned with jumping the gun and wanting to defend Oil companies (because you are rightly sick of hearing them trashed.....which I agree) - However, Oil companies are only part of the process -
Lack of refinery capacity is the biggest issue currently causing prices to be high......(that is due to enviro laws, etc) - However, there are also several other factors of which can be dealt with - Those dealing with the energy traders, those dealing with the lack of pressure being put on OPEC by the GWB administration and the lack of willingness of the GWB administration to stop putting oil into the SPR -
While I completely agree that oil companies are scapegoated by the liberal media and Dem's......that does not mean one intellectually ignores the other areas of concerns as to why gas prices are to high (artificially so in many cases).
You are missing a big part of the equation - Nannystate is already involved and part of the reason prices are artificially high -
We have the most coal and these days it can be used cleanly.
We won't have black cities like Pittsburgh in the 60s.
I cite this study over and over...folks seem to miss it.
We need to flip the bird to the middle east. We have enough coal for our energy needs for 500+ years. EFF oil, EFF the middle east. We also have Roserun formations all over the country that havn't been tapped. We have everything we need here in the USA, let Japan and Europe fight over Middle East Oil...BURN THE DAMN COAL THAT WE HAVE!!! Can't someone let W know these simple facts? Mind Boggling.
Very true - we can burn coal much, much cleaner today and it comes with a lot of other advantages (however, some fall-backs as well)
Nonetheless the coal option would be a good step in the right direction -
Nuclear energy would be a huge step ...that along with more refinery capacity for oil -
I am amazed at so called free trade. most everything ......but oil falls under strict guidelines why is that? I know price fixing is certainly illegal here.
Your post is well balanced and thoughtful, hence, you caught me off guard!!!!
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