OPEC Shuts Off the Spigot

[donsu]

http://www.businessweek.com/globalbiz/content/dec2006/gb20061214_998510.htm?chan=top%20news_top%20news%20index_top%20story

Many analysts think the new cuts may be overzealous restrictions of supply that overshoot OPEC's target oil prices


At its meeting in Abuja, Nigeria, OPEC on Dec. 13 announced another output cut of 500,000 barrels per day beginning Feb. 1, 2007. U.S. oil prices rose sharply by $1.20 per barrel to $62.57 on the news. It was the second announced cut in a matter of months. In October OPEC called for cuts of 1.2 million barrels per day to halt a 25% price drop.

OPEC is promising to make more production cutbacks because it detects a "continuing supply overhang" despite the earlier cuts. But a substantial body of analysts disagree and think that OPEC is playing a dangerous game that could damage a slowing world economy and, ultimately, hurt the organization's own interests. "OPEC appears on the verge of potentially killing the golden goose that lays the golden egg," said Lehman Brothers (LEH) Energy Economist Edward Morse in a recent note.

-snip-

Still, OPEC seems to want its customers, rather than the organization, to assume the risk of misjudgements. The organization may also want to recoup some of the purchasing clout lost by the recent fall in the dollar. OPEC producers earn oil revenues in dollars but spend a lot of euros and yen on imports. "A lot of things influenced our decision, including the dollar," said Saudi Oil Minister Ali al-Naimi.
-snip-
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wonder what snake Cheney's input was when he visited the Saudis?

isn't it always the 'customer' that assumes the risk of their manuvers?

[LoZoccolo]

1. Isn't Chavez a part of all that?

Why yes, he is!

[donsu]

2. explain please

nt

[LoZoccolo]

3. Venezuela is a member of OPEC.

http://en.wikipedia.org/wiki/Opec

That's Wikipedia, so you know it's a pretty reliable source.

[Webster Green]

4. Ah yes....the brutal dictator..

Thanks for the input, Pat!

[LoZoccolo]

7. Did I say anything about a dictatorship? n/t

[Webster Green]

8. Not in this thread

[Selatius]

10. Non sequitor

They're talking about OPEC as an organization, yet you bring up an unrelated fact to the issue being discussed. My mind goes, "What the fuck?"

[OPERATIONMINDCRIME]

13. Not Only A Part Of It, But I Believe One Who Was Pushing Hard For It.

[Bruce McAuley]

5. OPEC getting out of dollars.

Looks to me like they are selling dollars and buying Euros and maybe Yen.
The slow but stately rush to the exit from petrodollars, there goes America's economic cushion. We become just like anyone else economically.
Oughta take what?, maybe 2 years or so?
Just guessing here. Just about the time George gets out of office, possibly?
NAW! Just a nasty coincidence, you think?}(

Bruce

[Double T]

6. 'WE' have no one to blame for the falling value of the U.S. dollar BUT......

ourselves; the dismantling and foreign outsourcing of our manufacturing and service sector jobs will lead to a continual fall in the dollar. The USA no longer controls its destiny thanks to congress and corporate america manipulated by wall street and the shareholders.

[Cleita]

9. I just heard on Thom Hartmann this afternoon that some

company is starting to outsource it's legal department to India. I believe it was IBM. It was bad enough when all the factory jobs got outsourced, but now they are outsourcing the professional jobs too. Something really has to be done about this. I think it's time to force these corporations who want to do business in the USA, to pay really hefty fines if more than 35 or 40 percent of their jobs are gone to a foreign country.

[Double T]

12. We also need to STOP BUYING their products and services............

the ONLY message wall street and corporate america understand is the almighty dollar; time to hit THEM where IT hurts. The consumer needs to boycott and strike the outsourcing corporations if 'WE' really want to do something about THIS.

[Porcupine]

11. They have to pretend production cuts are on purpose....

but the truth is that they're producing flat out and have no margin at all. Saudi Arabia in particular is having trouble getting people to believe that a barrel of heavy sour crude replaces a barrel of light sweet on a 1 to 1 basis.

We are at or past the peak of oil production today. After this it all gets worse.

[spanone]

14. The Saudis gave up billions in lost revenue and STILL lost the Senate.

They're pissed