Why is oil below $50 right now?

[TDMVPDPOY]

prices arent goin down when its holiday season.....

[boutons_]

January 13, 2007

OPEC Consulting on Emergency Meeting - Algeria

By REUTERS

Filed at 12:08 p.m. ET

ALGIERS ( Reuters) - OPEC members are consulting one another on whether to hold an emergency meeting to discuss a 15 percent price drop since the start of the year, Algerian Energy and Mines Minister Chakib Khelil said on Saturday.

``There are consultations, but no consensus for the moment (on whether to hold one),'' he said in brief remarks to reporters.

Asked whether OPEC was planning to cut output again, he replied: ``We have already decided to cut production by 500,000 barrels per day (bpd) from February. If there is another decision to cut output, I would completely support the consensus decision.''

On Friday, the Dow Jones news service quoted a senior OPEC delegate as saying the producer group was discussing whether to hold an emergency meeting around January 20-21.

OPEC President Mohammed al-Hamli, also UAE oil minister, said on Thursday OPEC was deeply concerned by the price drop and stood ready if necessary to bolster the world market.

Mild weather so far this winter has curbed oil demand and pressured prices, blunting the impact of OPEC's planned 500,000 barrels per day cut in supply from February 1 that added to a 1.2 million bpd reduction last year.

==================

OPEC knows now that the market can pay $70/barrel like it has in the past year without killing demand (demand is inelastic) and tipping the world into recession and reduced demand.

I can't see why OPEC wouldn't reduce supply to put price back up to $70.

If they let it hang around at $50 or less, one has to ask why?

Do they really have the power and balls and co-operation (not all oil comes from OPEC) to keep the price as high as they want?

[TDMVPDPOY]

if opec keeps on playin around with the prices

i can see in the future, ppl will start to buy hybrid cars, and these countries who supply oil,

[PixelPusher]

Couldn't help but notice that rather prominet e on the graph is labelled "Iran/Iraq War"...we may be adding an "/Iran" to our Iraq war pretty soon.

[Clandestino]

market conditions caused the price of oil to drop. so, now OPEC will just cut production to keep its price per barrel at a range they want. so, yes, opec controls the cost of oil. they can artificially keep it high when the market would otherwise have the price low.

[boutons_]

"opec controls the cost of oil. "

so why is it at $50, when $70 has been recently proven not to destroy the world's economy?

[Clandestino]

did you not read the article you posted? they(opec) are holding an emergency meeting to get the price back up i'm sure.

[smeagol]

market conditions caused the price of oil to drop. so, now OPEC will just cut production to keep its price per barrel at a range they want. so, yes, opec controls the cost of oil. they can artificially keep it high when the market would otherwise have the price low.

Funny, this sounds exactly what rich nations do with commodities they produce, such as agri-stuff (manipulate the market with intervention, that is).

At the end of the day, the reality is that the mayoriy of the oil is owned by the Third World and they can do with it whatever they want.

Oil prices hurts others but helps those countries with oil reserves (sometimes it doesn't even help the people leaving in those countries, it simply helps their administrations: see Chevez or the Saudis as onvious examples).

Bottom line: countries, rich and poor, do what is best for them. And they care very little about the rest.

[Clandestino]

are you saying the bush does not control oil prices for american companies?

[smeagol]

are you saying the bush does not control oil prices for american companies?

What?

[Clandestino]

oil is at 50.85 right now..

[TDMVPDPOY]

oil prices per litre/gallon should be down atm around the prices b4 the afghan war, that should be the market price atm, but so far the oil companies are not passing on the savings to petrolheads but only reducing supply. The reason they are not going to decrease the price cose they know the market can pay for it, which is a load of bull and the fact that they are coming out claiming that they dont make that much profit is a load of horse .

The government is also to blame, they dont give the regularators enough authorighty over oil companies punishing them for price fixing etc, and the fact that govt doesnt give a horse and is always blaming the whichever foreign currency they use to measure the oil price per barrol aka US.DOLLARS OR SINGAPORE DOLLARS is another indicator of horse . Reason? fuel excise tax is the reason, as long they get there n share, they dont give a about prices.

[jochhejaam]

oil is at 50.85 right now..

In my area (NW Ohio) that means $1.75 a gallon.

After the $3.00+ last year I never expected to see it that low again.

[Clandestino]

i just love all the es who piled on are nowhere to be found...

[boutons_]

nowhere to be found? who's gone?

The Dems + a bloc of Repugs are voting to cut $15B in Repug subisidies, gifts, and tax cuts for the oilcos, aka, nullifying head's secret National Energy Policy.

[Pistons < Spurs]

In my area (NW Ohio) that means $1.75 a gallon.

Ann Arbor Mi -- $1.89

[boutons_]

January 28, 2007

Saudi Officials Seek to Temper the Price of Oil

BY JAD MOUAWAD

Saudi Arabia, which benefited immensely from record oil prices last year, has sent signals in the past two weeks that it is committed to keeping oil at around $50 a barrel — down $27 a barrel from the summer peak that shook consumers across the developed world.

The indications came in typically cryptic fashion for the oil-rich kingdom. In Tokyo last week, Ali al-Naimi, the Saudi oil minister, said Saudi Arabia’s policy was to maintain “moderate prices.” The previous week, on a stop in New Delhi, he effectively put his veto on an emergency meeting of the Organization of the Petroleum Exporting Countries to prop up prices after oil briefly dropped below $50 a barrel, the lowest level in nearly two years.

The events that propelled oil prices above $77 a barrel last July, then dragged them down again, were beyond the control of any single producer. Still, Saudi Arabia, which is by far the largest oil producer within OPEC and sets the cartel’s agenda, is seeking to avoid a repeat of the dramatic rise in prices while trying to put a floor beneath them.

Nowhere was last summer’s e in oil prices felt more profoundly than in the United States. As gasoline rose above $3 a gallon, consumers cut their spending elsewhere, tamping down profits in retail, travel and other industries. United States automakers were devastated as consumers fled from large vehicles to smaller ones, which have historically been the specialty of the Japanese; on Thursday, Ford said that 2006 had been the worst year in its history.

The recent slide back to $50 a barrel for oil — which translates to about $2 for a gallon of gasoline — has eased the pressure on the domestic economy, quieting talk that oil prices and the declining housing market would lead to a recession.

The Saudis appear to be rediscovering that painfully high energy prices take a profound toll on the global economy, which in turn reduces demand for their oil.

( but dubya refuses to do anything to reduce US demand for oil, to encourage consumption, to keep US demand for oil down, as that would hurt his budddies' $Bs of oilco profits. Imported oil should be tarifed so that the landed price has floor of $70/barrel, with the tarif revenues earmarked for energy conservation and not for $Bs more in oilco subsidies and tax breaks )

But other motives seem to be at work, too, including the Saudis’ desire to restrain Iran’s ambitions in the region.

How much influence the United States has exerted is an open question. Vice President Cheney met with King Abdullah of Saudi Arabia in Riyadh in November, but his office would not say if oil was discussed. The White House has been supportive of Saudi energy policy, and President Bush and his father are close with Prince Bandar bin Sultan, the Saudi national security minister and former ambassador to Washington.

Although Saudi officials say their oil policy is based on market considerations and not political ones, the meeting in November led to renewed speculation that the kingdom might be tempted to dry out Iran’s ambitions by pushing oil prices down. Prices have already been falling because of mild weather and slowing demand.

Prices at $50 to $55 a barrel are just about right for the Saudis, according to Saudi energy officials — not too high to hurt the global economy, not too low to hurt their own economy. Last year’s record highs meant that the growth in global oil demand slowed to 1 percent in 2006, compared with a 4 percent increase at its peak in 2004.

But 2006 was not the first reminder for the Saudis that too-high prices can backfire. The oil shocks of the 1970s and 1980s also set off a scramble for gas-sipping cars and a brief push to wean the West from its oil dependency. In recent months, the higher prices have rekindled America’s quest for alternatives and propelled energy security to the top of the agenda in the United States and Europe.

( the US govt should use a tariff on imported oil to create another "scramble" in the US for oil conservation and alternative energy )

Even President Bush, who began his presidency emphasizing the need to increase domestic oil production rather than cutting consumption, called for a reduction in gasoline use over the next decade in last week’s State of the Union address.

( "next decade" is dubya doing oilco bidding and using a code word for "never", just like all of his and head's energy policies which are nothingb but policies to protect and enrich energyco's. )

High prices have also emboldened rivals within OPEC, among them Iran and Venezuela, which have used their oil revenue to prop up their governments and export their more radical agendas. Saudi Arabia has worked cooperatively with Iran since the late 1990s, when oil producers were panicked by the decline of prices to around $10 a barrel. More recently, Iran has favored rising prices over the moderation that Saudi Arabia seeks. Venezuela also tends to favor higher prices but wields less political influence in the cartel.

“High prices are not in the interest of Saudi Arabia,” said Sadek Boussena, a former OPEC president from Algeria. “We’ve all seen what $70 does: it attracts alternatives, it reduces demand. On the other hand, I don’t think the Saudis want oil below $50. They need the revenue.”

( IOW, the Saudis have the US's testicles in Saudi hands. Real Macho Men would refuse their balls to be held by anybody, but fake Macho Men like dubya and head like their balls in Saudi hands since the oilcos pay them so well )

The Bush administration has repeatedly acknowledged Saudi Arabia’s efforts in trying to moderate prices. “Buyers and sellers have a common interest in maintaining reasonable prices for oil,” Samuel Bodman, the energy secretary, said in October.

( Wow, if you had ANY doubt about what I say is going going, then note that "buyers' and sellers' " interestes of course excludes the interest of we consumers who finance the buyers' and sellers' insane wealth. The buyers (oilicos) and sellers (oil producers) are in collusion to the consumers. and of course, suck the US into bull oil wars like Iraq. You people understand one of the SECRET motivations for the dubya and head's Iraq war was the sweetheart oil deals a US-friendly/grateful Iraqi puppet govt (oops!) was supposed to give US oilcos for extracting high-quality, shallow-depth, very high margin Iraqi oil)

There is no set formula for setting oil prices. In the 1980s, the market settled on around $18 a barrel as a fair price. In the 1990s, it was ratcheted up to $22 to $25 a barrel. Recently, oil producers have realized they can charge twice that amount, although consuming nations complain that the price is too high.

Mr. Naimi, the Saudi oil minister, borrowing the manner of a careful central banker, is rarely explicit about his plans. His every word is dissected by legions of analysts for the slightest hint of an inflection in policy.

( ... analysts whose balls are in Naimi's hands )

Sometimes, the uncertainty gives rise to more conspiratorial theories. Oil traders have been buzzing in recent weeks about whether Saudi Arabia was seeking to depress oil markets in hopes of crippling Iran’s economy, as a Saudi analyst — albeit not one from the government — suggested late last year in an opinion article in The Washington Post. The Saudis quickly dismissed the claim, but given the tensions in the Middle East, oil and politics remain closely linked.

( no ! The Repugs are exclusively the party, the s of Big Oil )

“It is difficult to work out what the Saudis really want, since they never say things explicitly,” said Leo Drollas, the chief economist at the Center for Global Energy Studies, a London-based research group founded by Sheik Ahmed Zaki Yamani, a former Saudi oil minister. Sometimes, he said, “you have to read between the lines.”

The Saudi government does not disclose what oil price it uses when it builds its budget, but analysts at Samba Financial Group, a bank in Saudi Arabia, say they believe the price is $42 a barrel for 2007, with oil production at about 9 million barrels a day.

With oil averaging $66 a barrel last year, the kingdom recorded a budget surplus of nearly $71 billion, Samba said, five times more than in 2005.

( and of course, we know the oilco 2006 profits were similary egregious )

Saudi officials repeatedly point out that they do not set the price of oil on international commodity markets — they point the finger at hedge funds and other speculative traders for the heightened volatility in recent years. Nor, they say, do they run their oil industry with political considerations in mind.

( ... the Saudis are lying, like Saddam was lying about WMD. But the naive American babes-in-the-wood, taking a hint from the Bible-thumpers' "literal" interpreation of the Bible, interpreted Saddam's words as "gospel truth". )

Mr. Naimi has led the ascent of oil prices since 2000 and managed his various partners within OPEC toward better discipline within the cartel. Last fall, under Saudi stewardship, OPEC members twice agreed to cut their output to prevent prices from falling too steeply.

More than any specific target, the Saudis have always sought stability in oil prices. But stability may prove just as elusive this year as it did last year, given how vulnerable global oil supplies remain to the vagaries of the weather as well as political turmoil in the Middle East and Africa.

Although OPEC’s 12 members decide by unanimous votes whether to increase oil production — which lowers prices by making supply more plentiful — consumer pressures ultimately hold sway, and an extremely cold winter followed by a very hot summer could override whatever price goals the Saudis have set.

( so an aggressive US plan to reduce CONSUMption would hold sway in forcing oil prices down, even to the late 90's $10/barrel, but that would be disastrous for oilco profits.)

Not everyone is reading the Saudis’ recent public signals — scant as they are — in the same way. “The Saudi policy has not changed,” said Roger Diwan, an energy analyst at PFC Energy. The Saudis, he said, have “led the way in managing the market. They showed leadership in OPEC.”

But Amy Myers Jaffe, the associate director of Rice University’s energy program, said she thought that Saudi policy had shifted, backing away from a defense of higher prices.

“The debate in Saudi Arabia is about what is the right strategy, where demand is headed, and what is the right amount of investments,” she said. “And that’s a very tough question.”

Jim Rutenberg contributed reporting.

http://www.nytimes.com/2007/01/28/bu...rtner=homepage

[smeagol]

Prices in Manhattan are still at $2.30 per gallon

[clambake]

Are you serious? That's "f"ing cheap!!!!!!!!

[01Snake]

Paid $2.05 this last night here in SA.

[TDMVPDPOY]

when oil prices were below $50, they didnt pass on the savings at the barrel, they always say its the lagging effect like how interest rates will hurt you 6months down the road, but in this case they always blame it on the lagging effect, and when the day they have the savings, they raise it back up the next day....how n lame when prices per barrel goes up there is no lag effect but to shoot it up as compared to down spiral prices

[RandomGuy]

I thought it was supposed to hit 80-100 bucks and gas to $4 a gallon by now. According to nbadan that is!

It is now trading at about $75.

I have said before, and I will restate it here:

Oil will continue to get more expensive at a rate faster than inflation for the rest of your lives.

Plan accordingly.

[RandomGuy]

January 13, 2007

OPEC Consulting on Emergency Meeting - Algeria

By REUTERS

Filed at 12:08 p.m. ET

ALGIERS ( Reuters) - OPEC members are consulting one another on whether to hold an emergency meeting to discuss a 15 percent price drop since the start of the year, Algerian Energy and Mines Minister Chakib Khelil said on Saturday.

``There are consultations, but no consensus for the moment (on whether to hold one),'' he said in brief remarks to reporters.

Asked whether OPEC was planning to cut output again, he replied: ``We have already decided to cut production by 500,000 barrels per day (bpd) from February. If there is another decision to cut output, I would completely support the consensus decision.''

On Friday, the Dow Jones news service quoted a senior OPEC delegate as saying the producer group was discussing whether to hold an emergency meeting around January 20-21.

OPEC President Mohammed al-Hamli, also UAE oil minister, said on Thursday OPEC was deeply concerned by the price drop and stood ready if necessary to bolster the world market.

Mild weather so far this winter has curbed oil demand and pressured prices, blunting the impact of OPEC's planned 500,000 barrels per day cut in supply from February 1 that added to a 1.2 million bpd reduction last year.

==================

OPEC knows now that the market can pay $70/barrel like it has in the past year without killing demand (demand is inelastic) and tipping the world into recession and reduced demand.

I can't see why OPEC wouldn't reduce supply to put price back up to $70.

If they let it hang around at $50 or less, one has to ask why?

Do they really have the power and balls and co-operation (not all oil comes from OPEC) to keep the price as high as they want?

It is now well above $70. Don't see a world recession in the offing...

[RandomGuy]

i just love all the es who piled on are nowhere to be found...

I have other things to do, biyatch, heh.

[RandomGuy]

It is now well above $70. Don't see a world recession in the offing...

85 with 100 in sight.

DUN DUN DUN!!