venezuelas oil

[bobdelt]

If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

 

[yllus]

He's investing for the long term in South America. Oil for political capital. From his perspective, it's a good plan.

 

[halik]

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Well the marginal cost of a barrel is actually very low, it's the R&D, overhead and a giant cartel that gets priced in in the market. I'm sure even at 40% he's making gross profit on the transaction.

 

[sandorski]

Originally posted by: halik

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Well the marginal cost of a barrel is actually very low, it's the R&D, overhead and a giant cartel that gets priced in in the market. I'm sure even at 40% he's making gross profit on the transaction.

Undoubtedly. Pumping Oil out of the ground is very cheap to do. < $10/bbl is likely, even 40% of current prices is likely to still double the cost.

 

[bamacre]

I will sell you anything I don't own for 40% off. 😉

 

[judasmachine]

This wouldn't exact account for the other 60%, but shipping say to the US from Venezuela would be a lot cheaper than say Saudi Arabia to the US, and have much less security burden.

 

[ntdz]

Well, the countries aren't gauging...the market sets the price of oil. They do have some influence over the price though with the OPEC Cartel.

 

[fskimospy]

Just look at it this way. The oil pumping infrastructure that they have now was planned and made to be profitiable when oil was around $25 a barrel (or less). Now it's double that. He's still doing just fine.

 

[Jaskalas]

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Being a dictator is priceless. That oil buys votes.

 

[Steeplerot]

Originally posted by: Jaskalas

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Being a dictator is priceless. That oil buys votes.

So how exactly is he a dictator? Lets see some links.

 

[judasmachine]

Originally posted by: Steeplerot

Originally posted by: Jaskalas

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Being a dictator is priceless. That oil buys votes.

So how exactly is he a dictator? Lets see some links.

Democratically elected leftists are all dictators, duh Steeplerot.

Anyone else got any more kool-aid?

 

[ayabe]

Originally posted by: Steeplerot

Originally posted by: Jaskalas

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Being a dictator is priceless. That oil buys votes.

So how exactly is he a dictator? Lets see some links.

Let's not start this again. please.

 

[GroundedSailor]

Originally posted by: eskimospy
Just look at it this way. The oil pumping infrastructure that they have now was planned and made to be profitiable when oil was around $25 a barrel (or less). Now it's double that. He's still doing just fine.

Absolutely. The oil producers were making a profit at the $20 mark which is just above what it costs to produce the oil. Even with the discount, Venezuela is making a profit - just not as much.

 

[zephyrprime]

Even expensive oil only costs about $15/barrel to produce. Some oil can be produced at $2/barrel. Even the tar sands of alterta which aren't even oil to start with can be produced for $11/barrel. Even with R&D and etc added in, oil is cheap to produce. Oil is a very profitable industry all over the world. The profits from oil basically pay for the venzuelian government. This is one of the fundamental problems with countries like VZ. Since they don't receive their funding from taxing the populace so much, they are unaccountable to the populace.

ntdz: "Well, the countries aren't gauging...the market sets the price of oil. They do have some influence over the price though with the OPEC Cartel."
If there is a cartel at work, then it isn't a free market now is it?

 

[Schadenfroh]

Originally posted by: Steeplerot

Originally posted by: Jaskalas

Originally posted by: bobdelt
If venezuela can offer oil at 40% off... isnt their, and all oil producing countries price guaging by quite a bit? I highly doubt Chavez is truley being that nice to take a loss on this... ? How is he doing this?

Being a dictator is priceless. That oil buys votes.

So how exactly is he a dictator? Lets see some links.

He is not a dictator, but this looks a little shady.....
http://forums.anandtech.com/messageview...atid=52&threadid=1969700&enterthread=y

Another win with a strong majority would give the Cuba ally a clear mandate to scrap presidential term limits and create a single-party that he expects to lead in power for decades.

He also aims to take further state control of the Caribbean country's top industry -- oil.

 

[imported_Lothar]

Originally posted by: eskimospy
Just look at it this way. The oil pumping infrastructure that they have now was planned and made to be profitiable when oil was around $25 a barrel (or less). Now it's double that. He's still doing just fine.

The best answer in this thread :thumbsup: