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Economy
OPEC isn't scared of $40 oil
2014-12-15
OPEC won't rush to cut oil production even if prices fall as low as $40 per barrel, one of the cartel's members said Sunday.
I'm sure the Saudis can handle it. Whether Venezuela, Iran and Russia can is another matter...
The energy minister for the United Arab Emirates told Bloomberg at a Dubai conference that the middle eastern oil producers believe "the market will stabilize itself."

"We are not going to change our minds because the prices went to $60 or to $40," Suhail Al-Mazrouei said.

Even as it has watched prices dip, OPEC declined to cut back on production at its November meeting. Some observers had expected a production cut to boost the price of crude.

Oil prices have tumbled 40% this year and are now trading below $60 per barrel, a five-year low. Gas prices have come down, too -- the U.S. nationwide average was $2.60 on Sunday. In some parts of the country, gas is below $2.

Lower energy prices are good news for consumers and some sectors of the economy, but they are not without victims. Plunging prices have been blamed for stock market turmoil, and some oil producers are concerned. Some have begun cutting back on spending and staff, and the U.S. shale industry is worried OPEC is trying to kill off its profitability.
Now commence all the hand-wringing...
How low can oil go? That's the question many are asking. A recent survey of investment strategists by CNNMoney found most believe the price of crude will rebound in the new year and round out 2015 at $74.
Posted by:Steve White

#8  "We can't murder other Mooselimbs, but we can starve them out."
Posted by: Mullah Richard   2014-12-15 20:58  

#7  Is somebody Sunni trying to cut into the capabilities of a Shiite neighbor, perhaps?
Posted by: James   2014-12-15 19:21  

#6  Nothing says it has to be House Saud that reaps the wealth from Arabian oil. Wink Wink.
Posted by: BrerRabbit   2014-12-15 18:29  

#5  They are riding this out hoping to drive the shale and US exploration into mothballs. We are in an interesting strategic game between the western oil companies and OPEC. If OPEC decides to reduce production we have won the oil wars. This is their last chance fight to maintain control of the world market.
Posted by: 49 Pan   2014-12-15 11:34  

#4  Spot on Ed. They've [Soodies and others] leveraged a highly effective over-pricing scheme for decades, and look at the Federal and State tax revenues it has produced. No, I doubt the scheme will somehow quietly go away.
Posted by: Besoeker   2014-12-15 10:56  

#3  The House of Saud is trying to explain to the west that it is necessary to include what the Saudis want into economic calculations, and don't think just because you've reached self-sufficiency that you can uncouple from their little operation.
The pusher always wins.
Posted by: ed in texas   2014-12-15 08:00  

#2  Before the oil crisis and embargo of the early 1970's Light Sweet Crude was selling for under $4.00 per barrel. I wouldn't attempt to put a temporary bottom on it just yet.
Posted by: Besoeker   2014-12-15 04:36  

#1  Me thinks the floor price of oil is about $35 a barrel.

The $100+ oil prices are a bubble unsupportable by economics. The speculators drove up the price of oil. When it costs a country less than $5 a barrel to deliver it to Andover, Delaware, $75 a barrel is a lot of profit.

Hopefully this pressure from Canada and the US oil production will kill off OPEC rather than vice versa.
Posted by: Mystic   2014-12-15 01:25  

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