About Opec

Money Morning asked:


By Jason Simpkins

Associate Editor

Money Morning

Oil prices fell again yesterday (Wednesday) – dropping below $40 for the first time in four years – as weak demand and growing inventories overshadowed a record cut in production by the Organization of Petroleum Exporting Countries (OPEC).

Light, sweet crude for January delivery fell $3.54 to settle at $40.06 a barrel on the New York Mercantile Exchange – the lowest level since 2004. Oil futures actually traded as low as $39.88 during the day yesterday. The slide came in spite of an announcement by OPEC that the cartel would cut its production quotas by 2.2 million barrels per day (bpd), a record amount.

“The Conference observed that crude volumes entering the market remain well in excess of actual demand: This is clearly demonstrated by the fact that crude stocks in OECD countries are well above their five-year average and are expected to continue to rise,” the group said in a statement. “Moreover, the impact of the grave global economic downturn has led to a destruction of demand.”

Since September, OPEC – supplier of 40% of the world’s oil – has issued three production cuts totaling 4.2 million bpd, or nearly 12% of its capacity. Still, the cartel has failed to establish a floor for oil prices, which have tumbled more than 70% from their July 11 peak of $147 a barrel. Oil has now given up all of the price gains it has made since 2004, in just the past five months.

 

The main reason for the decline is that the global recession has curtailed demand significantly, leaving many developed nations, as well as the cartel, with a significant buildup of inventories.

The U.S. Energy Information Agency reported yesterday that crude oil inventories increased 500,000 barrels from the previous week, while OPEC’s commercial inventories now stand at 57 days’ worth of supplies. OPEC President Chekib Khelil, said that his group wants to push inventories down to 52 days’ worth of supply and lift prices back up to $70-$80 a barrel.

However, OPEC may find it difficult to achieve those goals without help from non-OPEC nations, which balked at efforts to make a coordinated global production cut. After rumors circulated prior to the meeting that Russia and Azerbaijan might take part in the cuts, their contribution to OPEC’s effort came out flat.

“Russian oil companies have already made a decision to cut deliveries to the market… approximately equivalent to 350,000 barrels per day,” Russian Deputy Premier Igor Sechin told The Associated Press. Sechin added that the cuts had already been implemented in November.

Russia’s lack of involvement did nothing for an oil market that was crying out for a coordinated global effort. In fact, the statement came off as a thinly veiled attempt to repackage the already apparent decline in Russian oil production that has resulted from a lack of investment.

Even before Sechin’s comments, analysts had forecast a 1% decline in Russian oil output for this year, and a 2% drop in 2009.

Azeri Energy Minister Natik Aliev said it would back OPEC’s move by cutting production by 300,000 bpd, more than a third of its total capacity. Still, analysts estimate that an accident that took place on the country’s main pumping platform in October had already cost the country 500,000 bpd in output.

“We want non-OPEC countries to contribute, and not just benefit from the impact of our cuts,” a frustrated Khelil said after the meeting in Oran, Algeria. “It’s in their own interest as well as in ours.”

A lack of foreign cooperation will put even more pressure on OPEC, and could force the group to call another “extraordinary” meeting before its next scheduled gathering, set for March 25, 2009.

“I hope we surprised you,” Khelil said when asked whether the size of the cut would provide enough of a spark to ignite oil markets. “If you’re not surprised we need to so something about it.”

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Francisco

roccodog86 asked:


I live in New Jersey, the lowest I’ve seen for gas was yesterday at $2.59/gal for regular if you pay cash but I know that the national average is now just below $3.00/gallon. I heard that next week OPEC is calling an emergency meeting to cut the supply. If this happens will the price of gas continue to drop?

Clinton

daruis j asked:


If opec decides to cut oil production, since crude oil prices are below $60. How will this impact future/present oil stock earnings ex. xom,chev,axas,apl? I’ve also learned Russia has bout 25% of the worlds oil, and now they are extremely upset

Oscar

cindy_cee13 asked:


Oil is the lifeblood of the United States. Saudi Arabia, Iran, and other OPEC nations want to strangle us wit their high prices. We need their oil as much as they need our food. So, why don’t the United States charge them 3 or 4 times more for food we ship to them? They don’t care about us, so why should we care about them? Let them eat sand and drink their oil.

Tammy

thetimbosley asked:


Why don’t liberals light themselves on fire like they do when Big Oil supposely manipulates the market like OPEC does. Opec is the biggest price manipulator in the world yet liberals seem to be more OK with it than when Big Oil does it.

Christian

Mervyn Rees asked:


(c) 2008 Mervyn Rees

To start with, the price of fuel has gone sky high! But then I’m pretty sure you will have noticed that with so many factors at play in the recent rocket ship ride of oil prices, far be it for me to offer any more sage analysis than what you may already have heard:

1. That the conflict in Iraq has contributed to OPEC price instability.

2. That the recent hurricanes in the Gulf of Mexico have played havoc with US and international petroleum production and refinement in the region.

3. A general recognition that energy consumption practices must be seriously altered.

4. That, as Harry Potter seems to be everywhere these days, he must be involved, though J.K. Rowling has remained suspiciously quiet about it.

Anyone over the age of 40 has been hearing about the inevitable depletion of fossil fuels since the aptly named ‘energy crisis’ of the mid 1970’s, when for the first time, the West came face to face with the hard facts that:

1. Arab oil producing nations (OPEC) as well as Russian oil and gas, effectively have the world over the proverbial barrel, (of oil that is - black gold, Teheran tea) because of our frighteningly wasteful consumption of oil and gas at present.

AND

2. Our grossly improvident guzzling of said fuel HAD to be radically restructured, BEFORE we ran out of the stuff, or we all have to become familiar with the old horse and buggy once more.

That was thirty years ago and sadly, very little seems to have fundamentally changed since then. OPEC & Co still have the West over a barrel, and that’s simply because we haven’t altered our consumption practices to any great degree.

Or have we?

There’s no question that automobile manufacturers are producing more fuel-efficient cars than ever before. Compared to even the early 80’s, automobiles today generally have much higher fuel efficiency than their forebears.

Manufacturers have even gone so far as to create the ‘Hybrid’ vehicle - a car that runs on a combination of traditional petroleum and electricity. It does so by converting unused combustion engine energy, such as that normally squandered by braking or coasting, into electricity and then storing it in a battery.

This energy can then be used when needed by the hybrid’s electrical motor to assist the conventional engine at times when it’s at its least efficient - generally during low speed driving conditions or when climbing steep inclines.

Then there is the even more futuristic fuel cell vehicle. Essentially, this is a car which runs on a device (another highly specialized battery) which converts oxygen and hydrogen into water, the end result of the process being electricity that is then used to power the motor. Unlike conventional batteries, whose internally stored chemicals are finite and are eventually depleted, thus rendering the battery expendable, the fuel cell battery will continue to produce electricity as long as oxygen and hydrogen are continually introduced into it.

Apart from being relatively cheap to maintain, one of the main selling points of this design is that with the chemicals used to stimulate the process including pure hydrogen, the sole by-products of such an engine would be nothing more harmful to our environment than water vapour and heat. We could say farewell to the catalytic converter and emissions guidelines and testing, forever. Yes I know, it brings tears to your eyes, doesn’t it?

The automobile industry is clearly being forced to re-think its approach to fuel efficiency even further, as the line-ups and gas gouging prices of the 70s are with us once again, although thankfully they’ve left their bell bottoms and platforms boots at home this time.

The 80’s and 90’s were conspicuous by the appearance of the ‘monster’ car. SUV’s and mammoth trucks were all the rage offering an unprecedented sense of status, luxury and power for anyone with the laissez-faire to fork out tens of thousands of £’s or $’s for what amounted to a living room on wheels.

This decade seems certain to be characterized by just the opposite. Smaller, more fuel-efficient vehicles, even those that run on alternative forms of energy such as hybrids, electricity, or hydrogen fuel cells, are being marketed as the way of the future.

The question is, will these automobiles capture the interest and the buying power of the customer before the reappearance of the horse drawn carriage?

Stay tuned; but stock up on your sugar cubes and bags of apples, just in case.



Elaine

7thchild asked:


by Ron Spangler

As Congress debates a plan to save the financial markets on wall street, it appears speculators are leaving the stock market and returning to the commodities market especially in the oil market. After it was announced the oil market was under investigation and some speculators were found to be illegally manipulating the market, they retreated to the stock market and began short selling. As a result the price of oil began to fall. This was by no means the sole reason for the drop in the price of crude oil but it did play a role.

Now while Congress is busy with the Paulson bailout plan and short selling has been temporarily banned, speculators have returned to oil and the result is ever increasing prices for a barrel of oil. Since the current crisis began the price of oil has steadily increased from a low of $91 to the current opening of $109. Most people will attribute the increase on hurricane Ike and the disruption of the supply of oil from the Gulf Coast area. They will also point to OPEC’s decision to cut production. I would argue both have played a minor role in the increase for the simple reason that America’s demand for oil has decreased dramatically.

The real culprit is nothing more than greed. Across the Southeast there have been increased complaints of price gouging at the pumps. As soon as hurricane Ike landed the price at the pump went as high as a dollar more per gallon. The reason given at the time was speculation that we would see gas shortages nationwide. Contrary to some media reports it didn’t happen. Some gas stations have posted signs they are out of regular unleaded gas but are selling higher grade gas at you guessed it, ridiculously higher prices. Reports are coming out that these stations are really closing their lower grade less expensive pumps not because of a shortage but instead they are holding back in order to push the sale of their more expensive fuel. Employees have reported they were told to shut down their less expensive fuel pumps even though the storage tanks were full. As State Attorney Generals around the Southeast and Midwest started investigating these claims the price of fuel went down and overnight stations that didn’t have regular unleaded miraculously received delivery and began selling the less expensive gas. Like short sellers and speculators these people succumbed to the greatest sin of all, human greed.

Speculators and unscrupulous business people have no respect for what is in the best interest of the country, instead they are guided by their own self interest. Their daily quest for more and more dollars have blinded them as to the effect their greed is having on the everyday citizen and their country. As Congress debates the Treasury Secretary’s plan to save us from the upcoming disaster they must back away from party partisanship and for once consider what is best for the country. They must finally do something to free us from foreign oil, like passing a real energy bill that will allow drilling without all of the restrictions and limitations. They and the regulators of the markets must keep an eye out for the greedy speculator and CEOs that have little or no concern for their country. Our future depends on what this congress does in the next couple of days. If they continue on as a Do Nothing Congress concerned only with winning an election, then our future is grim at best.

More can be found at State_of_America



Raul

superjew812 asked:


For example, raise the price of rice that we ship to the M.E.

Jorge

laughing_blonde_28 asked:


Also how do you know this (like what source did you get this from)

Sharon

JHONRICKY asked:


Market prices for petroleum are moving upwards. This movement can be stopped only when alternate liquid fuels will become available in large quantities. OPEC (Organization of Oil Exporting Countries) controls and sets global prices for petroleum.

US oil companies follow the OPEC price lead gladly and are reaping excessive profits. Available petroleum reserves are being depleted at a rapid pace. For more detail go to: www.greateducationonline.com. Demand is overtaking supplies. Discoveries of new petroleum deposits are plummeting. Excessive prices for transportation fuels will lead to economic hardships and eventual economic collapse. World economies must find alternate liquid fuel supplies or they will self-destruct.

Remaining petroleum reserves are estimated at 1.3 to 2.3 trillion barrels. These reserves can only last 25 to 50 years at consumption rates that will exceed 50 billion barrels per year on an average for the next fifty years. This huge consumption will add more than 100 pap of carbon dioxide to the Earth’s atmosphere, which is already overloaded.

Transportation fuels are the lifeblood of modern economies. Foods, goods, and commodities must be transported to reach consumers. Short interruptions in transportation lead to economic crises. Long-term interruptions lead unavoidably to economic disasters and collapses. Governments and industries have not been able to develop sensible solutions for secure, future fuel supplies.

Many options for extending or replacing petroleum and its many refinery products have been proposed. Finding new petroleum deposits, making petroleum substitutes from coal or oil shale, producing ethanol from food crops, producing hydrogen using nuclear power, legislating “Cap and Trade” policies, and demanding strict energy conservation measures have been suggested. None of these energy supply options can withstand closer scrutiny and analysis.

If none of these popular proposals is acceptable in the final analysis, is there any solution left that can be developed in time, can be used for several centuries, will not slow global economies, and will in fact accelerate economic growth for all the world’s countries?

Only one single option for saving our world from economic collapse exists. We must learn how to convert solar energy into liquid fuels and we must prevent the use of precious, limited, fertile lands that produce food crops, feed livestock, or grow forests. We must learn how to grow and breed high energy yield plants, plants that have high energy contents and produce large amounts of biomass on a single acre of land.

Additionally, we must find energy conversion processes that convert biomass into petroleum substitutes and we must modify existing refinery techniques to produce liquid motor fuels from biotic petroleum substitutes. For more detail go to:: www.greatindustrialguide.com. None of these process steps is utopian. All of them can be developed and tested on a large scale in less than two decades.

The benefits of such an approach are manifold and exceptional. The world will be enabled to produce affordable, plentiful, and secure liquid fuels for centuries. Competition between food and energy producers for fertile lands is not necessary and must be outlawed. The continued use of the world’s inventory of combustion engines installed in automobiles, trucks, trains, ships, and airplanes is assured. The world’s facilities for oil refining and fuel distribution can be used without major changes. A seamless transition from a fossil fuel dominated economies to solar based economies is entirely possible. Millions of new jobs across the globe will be created. Nobody loses, most people win.

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Joseph