OPEC worried about high oil prices

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Stunt

Stunt

Diamond Member
Jul 17, 2002
9,717
2
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Yeah, it must be a hard-knock life getting all that money for all the oil you have. :roll:

OPEC isn't concerned for anything other than itself, they like higher oil prices; that's why they started the cartel to begin with. I see this as more of a last ditch attempt to keep people from investing in new technologies, oil sands projects, and converting to alternate fuels.

Anyone agree? What is the REAL reason they are making these comments?

OPEC worried about high oil prices-chief
Sun Aug 28, 2005 9:33 AM ET

By Haitham Haddadin

KUWAIT (Reuters) - OPEC oil producers are becoming increasingly worried over stubbornly high oil prices and will be exploring "various options" for the September meeting which will hopefully help ease prices, the cartel chief said on Sunday.

"We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," Sheikh Ahmad al-Fahd al-Sabah said in an English language statement in Kuwait City.

"OPEC will be exploring various options for the September meeting which will hopefully contribute to moderate prices," added Sheikh Ahmad, who is also Kuwait's energy minister.

He did not elaborate on the nature of these options.

The Organization of Petroleum Exporting Countries plans to meet in Vienna Sept. 19 to chart output policy as prices have surged to record highs even though the cartel is pumping at 26-year highs to build up world oil inventories ahead of peak winter demand.

On Friday, U.S. crude futures were hovering just below $68 per barrel as traders worry that OPEC is pumping flat out and would strain to make up any unexpected outages.

The OPEC president said oil resources and supplies are plentiful and the group has been producing more than the call on OPEC crude by 1.5 million barrels per day in the third quarter of the year.

He said existing spare capacity in OPEC countries, together with new capacity additions early next year, will be more than adequate to cover demand growth throughout the winter this year and in 2006.

Much of the new capacity to be added from OPEC and non-OPEC nations is in terms of lighter crudes which is needed by the market, Sheikh Ahmad noted.

"Furthermore, demand is starting to slow down as a result of high prices," he said.

"In view of these fundamentals, one expects to witness some price moderation rather than any further rise," Sheikh Ahmad added. HHH
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OS

OS

Lifer
Oct 11, 1999
15,581
1
76
Originally posted by: Stunt
Yeah, it must be a hard-knock life getting all that money for all the oil you have. :roll:

OPEC isn't concerned for anything other than itself, they like higher oil prices; that's why they started the cartel to begin with. I see this as more of a last ditch attempt to keep people from investing in new technologies, oil sands projects, and converting to alternate fuels.

Anyone agree? What is the REAL reason they are making these comments?
Click to expand...

OPEC benefits short term from high oil prices, but not long term. Chronic high oil prices encourages the development of alternative energy sources, which then directly compete against them.

This can actually be seen post OPEC embargo where a decade of high oil costs drove cars and appliances to become more energy efficient. That eventually drove the demand and cost for oil down, which is why oil was cheap during the 90s.

I'm not personally concerned about high oil prices, it is ultimately good for the US to reduce demand/dependence on ideologically opposed/hostile countries for energy.


 
Engineer

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: OS
Originally posted by: Stunt
Yeah, it must be a hard-knock life getting all that money for all the oil you have. :roll:

OPEC isn't concerned for anything other than itself, they like higher oil prices; that's why they started the cartel to begin with. I see this as more of a last ditch attempt to keep people from investing in new technologies, oil sands projects, and converting to alternate fuels.

Anyone agree? What is the REAL reason they are making these comments?
Click to expand...

OPEC benefits short term from high oil prices, but not long term. Chronic high oil prices encourages the development of alternative energy sources, which then directly compete against them.

This can actually be seen post OPEC embargo where a decade of high oil costs drove cars and appliances to become more energy efficient. That eventually drove the demand and cost for oil down, which is why oil was cheap during the 90s.

I'm not personally concerned about high oil prices, it is ultimately good for the US to reduce demand/dependence on ideologically opposed/hostile countries for energy.
Click to expand...


:thumbsup:
 
1

1EZduzit

Lifer
Feb 4, 2002
11,833
1
0
They must be getting ready to "short" the futures themselves.....that is if you believe them. ;) They could be lying out of there A$$E$ also.
 
2Xtreme21

2Xtreme21

Diamond Member
Jun 13, 2004
7,044
0
0
Right now the average has been sitting around $2.50 in my area (Pittsburgh, PA). It seems to be just enough that people are willing to keep buying it readily. I think that before a huge wake-up call is made to the American people, gas prices need to go up about $.25 more. Else we'll just be sitting here forking over $2.50 a gallon without really a care in the world.
 
R

Rainsford

Lifer
Apr 25, 2001
17,515
0
0
Gas is about $2.75 for the cheap stuff out here in Maryland, and people I know are starting to talk about changing their habits a little bit if it keeps up. And the people I know make a fair amount of money, middle to upper-middle class mostly. No major changes, but people are talking about things like being smarter when they run errands, doing a bunch at the same time in the same area, carpooling to work, etc. As others have said, we seem to be right at a key point on the demand curve, where an increase in prices will actually result in a decrease in profits for the oil companies.

My question is why are the oil companies (well, at least OPEC) acting like oil prices are some sort of weird number handed down by God that they have a hard time controlling? I don't fully understand the oil market, but I have a hard time believing any market price can be out of the control of the suppliers.
 
F

Future Shock

Senior member
Aug 28, 2005
968
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As Peter Maas wrote in the August 21 Sunday New York Times, it is getting more obvious that oil is reaching "The Breaking Point" (his article title), at which point Saudi Arabia cannot continue to raise it's output, and can only do so by damaging it's fields by using forced extraction (water, steam, etc.). Such an action would cause the overall output from those fields to be substantially less than if the oil was extracted slower - so both the Saudi's and the world at large lose out. However, the Saudi's also seem to want to alleviate fears that they may be running out of oil, both internally and externally, so they may push those fields as hard as they can to stem the panick or investment in alternatives. The exact level of reserves in the Saudi fields is a closely guarded secret, however Saudi ministers that have left government service have been inverviewed by Maas, and told a story about reserves much, much lower than the official government line, but a bit higher than the worst fears in books like "Peak Oil".

Sadly, Maas's article has been pulled from NYT.com, and is only available from the archives - but if this interests you I highly advise you to spend the $4 and get it - it's about 8 on-line pages..

Future Shock
 
Stunt

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Pfff, Engineer...you guys get off easy on gas prices, some of the lowest in the world.
 
R

Rainsford

Lifer
Apr 25, 2001
17,515
0
0
Originally posted by: Future Shock
As Peter Maas wrote in the August 21 Sunday New York Times, it is getting more obvious that oil is reaching "The Breaking Point" (his article title), at which point Saudi Arabia cannot continue to raise it's output, and can only do so by damaging it's fields by using forced extraction (water, steam, etc.). Such an action would cause the overall output from those fields to be substantially less than if the oil was extracted slower - so both the Saudi's and the world at large lose out. However, the Saudi's also seem to want to alleviate fears that they may be running out of oil, both internally and externally, so they may push those fields as hard as they can to stem the panick or investment in alternatives. The exact level of reserves in the Saudi fields is a closely guarded secret, however Saudi ministers that have left government service have been inverviewed by Maas, and told a story about reserves much, much lower than the official government line, but a bit higher than the worst fears in books like "Peak Oil".

Sadly, Maas's article has been pulled from NYT.com, and is only available from the archives - but if this interests you I highly advise you to spend the $4 and get it - it's about 8 on-line pages..

Future Shock
Click to expand...

Am I the only one that hopes gas keeps going up? I don't want it to go so far that it puts out economy in the crapper or anything, but just high enough so we really start looking at alternatives. I think our dependence on oil is a big weakness, not in a small amount because it places us in thrall to an unstable region of the world. Unlike the fear-mongerers who write a lot of the Peak Oil stuff, I think it's possible to come up with alternatives better than taking a step back 150 years, we just need the proper motivation.
 
Engineer

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: Stunt
Pfff, Engineer...you guys get off easy on gas prices, some of the lowest in the world.
Click to expand...

Do you complain when things go up, especially significantly? I'm sure you do...and if you don't, either you have too much money or aren't old enough yet.

It's irrevelant what the rest of the world pays.....When it goes up, I'm going to complain.
 
Stunt

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: Engineer
Originally posted by: Stunt
Pfff, Engineer...you guys get off easy on gas prices, some of the lowest in the world.
Click to expand...
Do you complain when things go up, especially significantly? I'm sure you do...and if you don't, either you have too much money or aren't old enough yet.

It's irrevelant what the rest of the world pays.....When it goes up, I'm going to complain.
Click to expand...
When you are buying a global commodity, your national pricing is important.

Sure you can complain when the price goes up, but at the same time be thankful you are on top of the rest of the world.

Of the countries who can afford to pay these prices, you are number 1, and oddly enough you have the cheapest prices....not a bad deal if you ask me.
 
Stunt

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: charrison
coal to liquids, $40/barrel


THis is what opec is afraid of....
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Interesting, I'd like to see the energy consumption for this method relative to oil extraction.

Also, coal typically has nasty contaminents, do those get burned of during liquefaction?
 
Engineer

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: Stunt
Originally posted by: Engineer
Originally posted by: Stunt
Pfff, Engineer...you guys get off easy on gas prices, some of the lowest in the world.
Click to expand...
Do you complain when things go up, especially significantly? I'm sure you do...and if you don't, either you have too much money or aren't old enough yet.

It's irrevelant what the rest of the world pays.....When it goes up, I'm going to complain.
Click to expand...
When you are buying a global commodity, your national pricing is important.

Sure you can complain when the price goes up, but at the same time be thankful you are on top of the rest of the world.

Of the countries who can afford to pay these prices, you are number 1, and oddly enough you have the cheapest prices....not a bad deal if you ask me.
Click to expand...


Compared to the rest of the world, you're correct. Not a bad deal. Compared to last year, or the year before...or 1998 (Gas was $0.49 in Corbin, KY per gallon in 1998), it's up. Sorry, I'm fiscally conservative with my money at both the local and national level! ;)
 
Engineer

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: charrison
Originally posted by: Engineer
Originally posted by: conjur
Then start complaining more, Engineer:

>$70/bbl
http://today.reuters.com/news/newsChannel.aspx?type=businessNews
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I always complain when things go up.

Makes me wonder if the "it will see $40 before $80 crowd" really knows what they're talking about! :(
Click to expand...




Looks like we may get to see who is right here soon...
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If it doesn't hit $80 by Labor Day, it won't hit $80 this year. Yet, it won't go to $40 again unless some outside force takes hold, such as alternatives that scare OPEC or actually lower the use of oil.

 
Hayabusa Rider

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,879
4,268
126
Well, thank the war effort here. Seems the war premium is higher than it was originally thought to be.

Oh well, not surprising I suppose.

 
Engineer

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: Hayabusa Rider
Well, thank the war effort here. Seems he war premium is higher than it was originally thought to be.

Oh well, not surprising I suppose.
Click to expand...

Yep.

Speculation and fear from the ME....a big chunk caused by the war in Iraq.
 
N

nergee

Senior member
Jan 25, 2000
843
0
0
If the refineries sustain extensive storm damage, I guess we can expect
$3.00/gal gas sooner than expected.....
 
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