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The death of OPEC (about time)
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| VERTiG0 |
http://blogs.moneycentral.msn.com/t...th-of-opec.aspx
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Saudi Arabia walked out on OPEC yesterday, saying it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.
As the world's largest crude exporter, the kingdom in the desert took its ball and went home.
As the Saudis left the building, the message was shockingly clear. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate told the New York Times. “We will see what the market requires and we will not leave a customer without oil."
OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude was due to "oversupply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the US and EU for a time. That political battle is only at its beginning.
The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. The breadth of that deposit has now expanded.
OPEC needs the Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member, it forfeits its leverage.
OPEC has made no announcement about any possibility of dissolving, but the process is already over. |
Oh those noble Saudis (hah). Time to buy V8s. |
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| Skipper |
| That's more of a blog than a news article. |
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| TO guy |
Very interesting.
Odds of war over this? |
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| malek |
| 50 cents a liter anyone:gsmile: :gsmile: :gsmile: |
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| VERTiG0 |
| quote: | Originally posted by Skipper
That's more of a blog than a news article. |
I'm sure the news articles will hit later or tomorrow. |
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| MarkT |
| I think it's becoming more and more accepted that the ongoing volatlitiy has been mainly due to speculators driving up the price...not because of supply, demand or even politics. |
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| zokissima |
| quote: | Originally posted by malek
50 cents a liter anyone:gsmile: :gsmile: :gsmile: |
Yeah, cuz I'm sure we'll see this. |
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| Abercrombie |
| quote: | Originally posted by zokissima
Yeah, cuz I'm sure we'll see this. |
I saw it in Caracas, Venezuela not long ago while gase was around a dollar here :( |
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| patpicos |
theres a reason they call the OPEC a cartel...they are crooks
Glad the saudis walked out. |
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| Magnetonium |
Russia going to "punish" EU and USA? Give me a break.
Though Saudis do have a lot of power and say because obviously they are the world's #1 oil producer. But Russia is #2. Saudi Arabia, one of the world's most repressive states, is trying to be kind and friendly to the consumers around the world, but if Russia joins OPEC officially, then the organization could still save some of its prestige and power.
I wonder just how far the gas prices will drop as a result of all this. I doubt it. |
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