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I'm just curious how those who claim the cartel controls the market will explain this. OPEC can influence prices, but only the demand side can really determine them.
OPEC only controls about 40% of world oil production, if floor were really pulled away under the feet of oil price, OPEC would not be able to stop it, nor could other non-OPEC oil producing nations That's why we used to have single digit oil price that collapsed Soviet Union and Russia's economy.
BTW, I always believe the hike of oil prices owe more to speculative investors and the tanking of the dollar than to real shortage of supplies. Basically, we have too much money and US dollar doesn't give investors strong confidence, people need to put their money in something with more stable values, oil, as the lifeline of modern economy, basically took over the reserve currency role over the past few years. It's very interesting to look at the relationship between oil and dollar, between Saudi Arabia, other gulf nations and United States and China, Japan, the stability of the triangle is pivotal to American economic model, I would say.
"oh look at us, we think we still control the world like we did in the 70s. Oh no, our profits! Let's slash production and show them who's boss. Oil should be $100/barrel to be fair (says Iraq oil minister). WTF, mate? It still went down. Maybe we should slash some more."
Individual OPEC countries:
"ummm, hell no I'm not slashing production anymore. That last slash cost me a lot. So, I'm going to produce more and sell it at a lower price, *******. *produces more at lower price, others follow, become competitive, oil price drops more*"
*OPEC DISSOLVES!*
That's a wishful scenario. But, the individual OPEC nations seem hesitant to drop production anymore with fears of cutting into minimum production to cover costs. So this ought to be an interesting couple of months.
I always believe the hike of oil prices owe more to speculative investors and the tanking of the dollar than to real shortage of supplies.
That is so true. Many investors thought that this bubble could last forever. Now, they're liquidating everything (including commodities like oil) to get their cash "safe". This is causing that speculated price to drop heavily and is finally going to a true equilibrium. This coupled with contracting industry will cause the price to drop.
I predicted that oil would not surpass 150.00 at the height of the bubble. I also say that 40.00 is the floor and oil cannot go lower than that. Because the irresponsible federal reserve has no regard for the value of the dollar, I expect oil prices to rise after the floor is reached this winter and climb to over 100.00 a barrel sometime next year as inflation kicks in. We have yet to reach a worldwide peak and if a worldwide recession takes hold I expect peak oil to be pushed more in the future. If the government would have kept its hands out of the market and not inflated, gasoline could have returned to 99 cents a gallon.
After the election is over, the price goes up. Bush already had this deal in the cards, as he was hoping the lower oil prices would propell McCain to victory. Keep in mind that Bush made the deal for rapidly falling oil prices before the financial collapse was conceived, so he wasn't banking on this financial crisis.
After the election is over, the price goes up. Bush already had this deal in the cards, as he was hoping the lower oil prices would propell McCain to victory. Keep in mind that Bush made the deal for rapidly falling oil prices before the financial collapse was conceived, so he wasn't banking on this financial crisis.
Care to explain the mechanism by which George W. Bush controls oil prices?
After the election is over, the price goes up. Bush already had this deal in the cards, as he was hoping the lower oil prices would propell McCain to victory. Keep in mind that Bush made the deal for rapidly falling oil prices before the financial collapse was conceived, so he wasn't banking on this financial crisis.
So you think this is rigged for the US elections ?
After the election is over, the price goes up. Bush already had this deal in the cards, as he was hoping the lower oil prices would propell McCain to victory. Keep in mind that Bush made the deal for rapidly falling oil prices before the financial collapse was conceived, so he wasn't banking on this financial crisis.
And yet earlier you predicted oil to be at $200 a barrel by year end.
Have you suffered damage to the portion of your brain controlling long-term memory?
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