OPEC makes largest oil production cut in history
12-17-2008, 10:51 AM
#1
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OPEC makes largest oil production cut in history
Opec today announced they are cutting oil production by 2 million barrels a day. They were joined by Azerbaijan who said they would cut an additional 600,000 barrels a day on top of OPEC's cuts. This is on top of the 1.5 million barrels of oil a day cut announced in October. This is the largest oil production cut in history.
To put this into perspective, world oil demand is about 86 million barrels a day. So just in the past 2 months, OPEC has cut world oil production by 5%.
And what happened to oil prices today, they are down about 5% to $41 per barrel.
The way I see it, OPEC just lost 4 million barrels a day x $40 a barrel, or about $160 MILLION dollars every day, or $58.4 BILLION dollars over the course of a year.
Oil prices are not controlled as much by the supply side as they are by the demand side. We could have even more influence on oil prices than OPEC does. If we keep our consumption low, who cares if they cut production. They are just taking money right out of their pockets! And we should all just stand by and let it happen.
To put this into perspective, world oil demand is about 86 million barrels a day. So just in the past 2 months, OPEC has cut world oil production by 5%.
And what happened to oil prices today, they are down about 5% to $41 per barrel.
The way I see it, OPEC just lost 4 million barrels a day x $40 a barrel, or about $160 MILLION dollars every day, or $58.4 BILLION dollars over the course of a year.
Oil prices are not controlled as much by the supply side as they are by the demand side. We could have even more influence on oil prices than OPEC does. If we keep our consumption low, who cares if they cut production. They are just taking money right out of their pockets! And we should all just stand by and let it happen.
12-17-2008, 11:30 AM
#2
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The way I see it, OPEC just lost 4 million barrels a day x $40 a barrel, or about $160 MILLION dollars every day, or $58.4 BILLION dollars over the course of a year.
Oil prices are not controlled as much by the supply side as they are by the demand side. We could have even more influence on oil prices than OPEC does. If we keep our consumption low, who cares if they cut production. They are just taking money right out of their pockets! And we should all just stand by and let it happen.
Oil prices are not controlled as much by the supply side as they are by the demand side. We could have even more influence on oil prices than OPEC does. If we keep our consumption low, who cares if they cut production. They are just taking money right out of their pockets! And we should all just stand by and let it happen.
12-17-2008, 11:39 AM
#3
Prime Minister/Moderator
Joined APC: Jan 2006
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Not much. The smart arabs have used their money to diversify and prepare for the oil-less future.
UAE leveraged their position on the globe to become a crossroad for commerce between asia and europe.
A few other gulf states are dabbling in aluminum production.
12-17-2008, 11:54 AM
#4
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Joined APC: Mar 2008
Position: Curator at Static Display
Posts: 5,681
Sweet Irony
The greatest resource they have is: (drum roll, please)--sand.
And ironically, they have to import sand to make concrete structures. Why?
Because the whole peninsula used to be a sea-bed, and it has too much salt in it.
And ironically, they have to import sand to make concrete structures. Why?
Because the whole peninsula used to be a sea-bed, and it has too much salt in it.
12-17-2008, 12:13 PM
#5
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It is ironic that all of this Oil Speculation stuff has subsided since oil is down (of course the prices weren't speculated down...right?) Everyone used the Congressional scapegoat of those evil futures traders "driving the price up" when they really did not know what speculation was/is.
Right now is the time for speculation... the market awaits liquidity while spots for futures are turning some cash... in other words some traders are, indeed, hoarding huge amounts of oil...EIA estimates that domestic oil inventories have risen about 9%.... when liquidity hits the market (if it does)... oil will go back up... a question will be when and how fast the government induced liquidity is added.... my very amateur opinion is that oil will be around $70-75 average next year... but time will tell.
Right now is the time for speculation... the market awaits liquidity while spots for futures are turning some cash... in other words some traders are, indeed, hoarding huge amounts of oil...EIA estimates that domestic oil inventories have risen about 9%.... when liquidity hits the market (if it does)... oil will go back up... a question will be when and how fast the government induced liquidity is added.... my very amateur opinion is that oil will be around $70-75 average next year... but time will tell.
12-17-2008, 01:16 PM
#6
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There was a great article in the Sunday paper about how Dubai is in dire straights over lack of income. It said they are virtually bankrupt and stopping progress on all the big projects. All caused by the lack of oil revenues.
12-17-2008, 02:01 PM
#7
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12-17-2008, 08:08 PM
#8
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Not much out there.... With all of the IED's, sometimes it feels like explosives grow in the sand.... They just grow up like a wild fruit, when it is ripe, BOOM! Bad analogy, I know, But that is how it seemed to me.
Anyhow, Eventually oil will run out, when it does, I would like to be a fly on their wall then! However, this is them trying to be powerful and control the worlds markets again... They are seeing now, that they dont weild as much power as they thought...
Anyhow, Eventually oil will run out, when it does, I would like to be a fly on their wall then! However, this is them trying to be powerful and control the worlds markets again... They are seeing now, that they dont weild as much power as they thought...
12-17-2008, 09:01 PM
#9
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Let's hope we learn the lesson we should have learned in the 1970's and sucking off oil.
12-17-2008, 09:17 PM
#10
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Our national security "experts" should have weaned us off of foreign oil back in the 1970s. Its is amazing how much American energy money is turned against us. I'm certainly not a tree hugger, but uh - shouldn't we make it a national security priority to not NEED anyone that hates us?
I'll never forget watching September 11th unfold live while I was at work at an airport in Michigan. I will never forget watching masses of people in countries that we buy oil from CELEBRATE the terrorist acts by jumping up and down in the streets. Are we STUPID for allowing ourselves to depend on countries like that?
I'll never forget watching September 11th unfold live while I was at work at an airport in Michigan. I will never forget watching masses of people in countries that we buy oil from CELEBRATE the terrorist acts by jumping up and down in the streets. Are we STUPID for allowing ourselves to depend on countries like that?
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