You have commented 339 times on Rantburg.

Your Name
Your e-mail (optional)
Website (optional)
My Original Nic        Pic-a-Nic        Sorry. Comments have been closed on this article.
Bold Italic Underline Strike Bullet Blockquote Small Big Link Squish Foto Photo
Submit your comments on this article
International-UN-NGOs
Opec to go ahead with output cuts
2004-04-01
Ministers from the oil producers' cartel Opec have said they will go ahead with a planned oil output cut. President George W Bush said he was "disappointed" with Opec's refusal to reverse last month's decision. Opec had been under pressure not to cut output by 4%, or one million barrels per day, from 1 April. In the US, where oil is trading near a 13-year high, the high cost of petrol is becoming an election issue, and some fear oil could reach $40 a barrel. The democratic challenger, John Kerry, has criticised President George W Bush, insisting he is doing nothing to reduce petrol prices. The Bush administration however has accused Mr Kerry of wanting to raise tax on petrol, and stressed it has been having talks with Opec members.
Time for some full-contact negotiation with the Soodis?
Tom James, director of commodity derivatives at Tokyo-Mitsubishi International, said fuel prices have been lifted by rising global demand for oil as well as the threat of Opec output cuts. "In China, crude oil imports have risen by 30% year on year, and this has pushed prices higher as well." In the US, light, sweet crude stood at $38.35 per barrel on 17 March, its highest level in 13 years. Crude oil prices are expected to remain above $30 per barrel in the foreseeable future, having risen 10% so far this year. Crude is trading 15% above 2003's average price. One factor in Opec's decision was that oil prices are denominated in dollars, and the falling value of the dollar on international currency markets has reduced the real value of the oil revenue of Opec members. Some analysts say a production cut is likely to push prices for crude oil to well above $40 a barrel. That could push the global economy into a slump, and Opec, in turn, could suffer as well if a downturn ends up driving down demand for oil. So far, most European countries have not yet felt the impact of high oil prices, because they have been compensated by the decline of the dollar against the euro and other currencies.
If I didn't know better, I'd say some OPEC members want a world slump.
Posted by:Steve White

#12  Fred Pruitt censors truth while Americans die in Iraq on basis of lies.
Posted by: Opec TROLL   2004-04-01 7:56:47 AM  

#11  Caught part of comment on the radio today that the Gov of Alaska, ticked off that Congress won't permit drilling in the Refuge, wants to open up ocean drilling along the Alaska coastline! Believes Alaska can use the money and the US can use the oil. AP, can you confirm?
Posted by: OldeForce   2004-04-01 8:14:28 PM  

#10  yes the dollar value is part of the problem - but the real problem is the sods - they want Bush out so the heat is off on reforms. just look at when oil cuts started qtr 4 of 03 and since we have heard nothing but cuts, cuts, cuts. they want to spoke the oil markets and make pay more..thus hoping to influence the election. it is to bad we americans are naive and do not see the sods for who they are -An Enemy-

sooner or later we will need to deal with the sods
Posted by: Dan   2004-04-01 4:36:19 PM  

#9  "....they should realize that people in Africa and Asia will starve as a byproduct."

If people are starving in Africa, they should move to France!

( * Bonus for anyone who can ID the comic strip for that quote * )
Posted by: Raj   2004-04-01 1:17:24 PM  

#8  The joke will be, however, that even if Skeery wins, they'll keep the prices up - won't matter by then cuz he'll be toothless to stop them and, in fact, will prolly owe them for his win.

Kerry has indicated that he'd "pressure" OPEC (read: BEG) to increase production. Comforting thought, that. The only sensible proposal he made was to scale back all those specialized fuels for geography-specific locations. That probably would do wonders here in CA.
Posted by: Bomb-a-rama   2004-04-01 11:23:00 AM  

#7  "....they should realize that people in Africa and Asia will starve as a byproduct."
mhw my friend the American left cares not one tiny bit. They would whore their own mothers to get back into power at this point.
Posted by: Secret Master   2004-04-01 11:08:28 AM  

#6  "OPEC" - I.E., the Saudis - have decided to cut production. We'll have to wait and see if the members actually follow through. We're currently seeing OPEC production about a million barrels a day above "target" figures. More than half the world's petroleum is produced by non-OPEC members, and the US gets almost 2/3 of its petroleum from non-OPEC members. We'll have to wait and see how this plays out, long-term. Sooner or later, though, the United States is going to HAVE to deal with Saudi Arabia, and I do mean crush the HE$$ out of that pretentious bunch of camel jockeys and their state-sponsored terrorism known as Wahabbi Islam. The sooner, the better, IMHO.
Posted by: Old Patriot   2004-04-01 10:03:01 AM  

#5  Petro-economics and a little downtime fine tuning is behind this. Hard to maintain output on a 24/7 basis without wear and tear on facilities and support logistics. Also, oil is too damn cheap versus its potential reserves. Needs to balance out. USA has always been in denial over the "real" cost of petro on a life-cycle costing basis. We are probably too elastic in terms of our cost structure. Gas is actually cheaper on price elasticity basis since the early 60's yet reserves have depleted not grown. This even counts the finds in Caspian and Sakhalin which had always been in the computations as unrealized reserves. In long run, this is good for us but politically dangerous for Bush.
Posted by: Jack is Back!   2004-04-01 9:12:09 AM  

#4  Ben,
I don't think Iraq can quickly increase oil production. The pipeline in the North isn't that big and the pipeline and port infrastructure in the south isn't that robust.

A missing thought here is that the biggest victims of high oil prices are the world's poor countries. If the left is 'routing' for high oil prices to hurt Bush (which they probably are), they should realize that people in Africa and Asia will starve as a byproduct.
Posted by: mhw   2004-04-01 8:20:16 AM  

#3  [Troll droppings deleted]
Posted by: Murray TROLL   2004-04-01 7:56:47 AM  

#2  It might be because of what they see of Iraqi production numbers, how Iraq will now be able to sell oil on the open market, without sanctions or bribery, and how that will hurt their bottom line.

Iraq and Saudi Arabia are, I think, the only two countries with excess oil production capability. Which means these two countries are the ones that set the price of oil. Iraq is in US hands for now, and Saudi Arabia knows what we really think about them and how easy it would be for us to bankrupt the kingdom by increasing production and pushing the price of oil down very low.

They are scared, and grabbing as much as they can before it comes crashing down around them.
Posted by: Ben   2004-04-01 3:43:24 AM  

#1  I think there's a pretty good chance that the Saudis, who are really the only stand-alone force within OPEC - the big dog, are doing 3 things:
1) Punishing the US / West for interference in ME.
2) Grabbing as much as they can as fast as they can while they can cuz the gig won't last forever.
3) Trying to guarantee a Bush defeat.

I would not be at all surprised to learn of large contributions 3rd or 4th hand to Skeery campaign coffers or closely aligned "soft money" groups. The joke will be, however, that even if Skeery wins, they'll keep the prices up - won't matter by then cuz he'll be toothless to stop them and, in fact, will prolly owe them for his win.

When this breaks the back of any recovery in Europe and threatens to do the same to the US, will we finally shake off the blinders?
Posted by: .com   2004-04-01 2:56:21 AM  

00:00