OPEC Refuses Oil Production Increase After Contentious Meeting (Oil Prices Rise)

[villager]

Source: WSJ

By Mark Gongloff

OPEC has decided to keep its production output unchanged, defying market expectations for a production increase, which is driving up oil prices suddenly.

Nymex crude is now up nearly 2%, back above $100 a barrel, and Brent crude is up to $118. Both were down ahead of the OPEC news.

A meeting of oil ministers in Vienna broke up unexpectedly without an agreement to raise production. OPEC’s president said some members wanted three months to consider the issue.

Iran, Venezuela and Algeria refused to consider a production increase, a delegate in Vienna told CNBC. Saudi Arabia already plans to increase production, according to reports yesterday, and it’s possible other OPEC members didn’t feel the need to join them.

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Read more: http://blogs.wsj.com/marketbeat/2011/06/08/opec-keeps-oil-production-unchanged/

[theophilus]

1. What a surprise! Not.

For one thing, I don't believe they CAN substantially increase production. I think this "meeting" was an entertainment put on by these blood sucking parasites. On another topic....how nice is it that Iran can cost the average American tons of cash on a whim? Gee, you'd think that our government would eliminate the power of countries like Iran to harm the American people. But I guess "it's just business" is the call of the oil companies. How stupid is all this? Very.

[dipsydoodle]

2. OPEC's production is already 2 million / day over the last agreed figure

.

[theophilus]

3. Isn't that pretty much a "drop in the bucket"? n/t

[dipsydoodle]

4. I meant to say billion.

.

[Arctic Dave]

5. 2 million B/D is not a drop in the bucket.

That takes some serious infrastructure to accomplish.

[theophilus]

6. How many OPEC countries are involved? Is this only from SA? How long has

the production been at this level?

[Arctic Dave]

7. Here is link to their home page.

http://www.opec.org/opec_web/en/


You have to remember, getting it out of the ground is just one step. You have transport, refine and ditribute it once it's out.

[SkyDaddy7]

9. The "Blood Sucking Parasites" are Iran & Venezuela!! nt.

[dotymed]

10. The "Blood Sucking Parasites"..

Are on Wall Street.

[SkyDaddy7]

12. True but Iran & Venezuela are giving them an...

Xmas in June! With Iran & Venezuela refusing to up production it will provide cover for Wall Street to run prices up even further. Oh well.

[ronnie624]

15. In the interest of painting an accurate analogy,

wouldn't the "Blood Sucking Parasites" be those who, on average, consume many times more energy than either Iranians or Venezuelans?

I wonder who that might be?

[SkyDaddy7]

18. Very True!

[dotymed]

8. The "speculators" will find this as great news.

Until (if ever) they are taken out of the equation, our oil (and all things petroleum, millions of items, like plastics) prices will remain "unnaturally" inflated.

What about the repubs dedication to "free market conditions?"

Speculators are not naturally occurring market forces. They are a manifestation of greed that have no relation to "supply and demand."

[Spider Jerusalem]

11. I'd argue that it's not unnatural inflation

in fact if one considers its utility and value oil is probably significantly under-priced even at a hundred dollars a barrel. (Also it's not "our" oil; not when most of it is produced in other countries)

[dotymed]

13. Please have patience Spider Jerusalem.

Double-negatives make me have to think...lol.

Do you think the speculators should be considered "natural inflation?"

When I refer to "our oil", I refer to the oil we purchase, which then becomes ours. Actually, IMO, oil belongs to everyone in the country in which it is "harvested." Of course we should all have to pay for the extraction, refining process, etc.

I have many Socialist beliefs. Hugo Chavez, IMO, has the right idea about their national ownership of a natural resource in their country.

Too bad that in America, like in many countries, corporations "own" whatever they take, even the natural resources of a nation.

[Spider Jerusalem]

14. I think that blaming the price of oil on speculators...

is a convenient way to overlook the elephant in the room of energy supply. Which is that oil production is not presently sufficient to meet rising global demand largely driven by India and China. Oil is a finite resource with a limited supply; up until fairly recently we hadn't yet tested the limits of that supply. The closest would be the Arab oil embargo of 1973; that was an artificial supply constraint though and not a natural one. The brutal fact is that the world in general and America in particular has been reliant for too long on readily available and abundant supplies of cheap oil, and now because of demand growth and natural supply limitations the era of cheap oil is at an end. Blaming it on "speculation" will not change this.

[ronnie624]

16. Nonsense.

We need to use less oil.

Period.

[Spider Jerusalem]

19. Well yes but where did I say we shouldn't?

[ronnie624]

20. Oops.

I was scurrying about, getting ready for work, and in my haste, I misread a portion of your message. I thought you were saying, like so many Americans, that we're special, and we deserve cheap gasoline, and that oil producing countries should accede to our demands and give it to us.

Sorry about that.

[dotymed]

21. "Blaming it on "speculation" will not change this."

I am putting "the blame", squarely where it belongs.

The oil speculators ARE responsible for the high price of oil. If you even scratched the surface on research, you would realize this. I am definitely not alone in this observation. Bernie Sanders is currently trying to legislate the speculators out of the picture. Their only "job" is to bet on and then artificially rise the price of oil.

I agree that "the world in general and America in particular has been reliant for too long on readily available and abundant supplies of cheap oil."

IMO, we should immediately begin to switch our energy demands to green alternatives. Solar, wind and hydro power are the answers. It could (if handled correctly) employ hundreds of thousands of Americans, which would solve much of America's financial woes. It is common knowledge that the oil companies have, for decades, been buying and/or destroying new, green, innovations in the power industry. Unless they can control and profit from these innovations, they want them destroyed.

It is much like the criminalization of marijuana. Until its production and use can be controlled and profited on by TPTB, it will remain illegal. They are already profiting handsomely off of its current illegal status.

Spider, I suspect (strongly) that you know that speculators are greatly increasing the price of oil in order to profit from it.

[Spider Jerusalem]

22. Well no you actually aren't...

and I would argue that you don't actually understand what you're talking about.

This is quite simple: global demand for oil is now at a level roughly equivalent to or slightly greater than global oil production. There is no margin for overhead; the dirty secret of OPEC is that they don't actually have the spare capacity to significantly increase production. Saudi Arabia may, to a very limited extent, but not enough to make a difference. And meanwhile world demand for oil has increased by 20 million barrels a day in the last 15 years, driven by China and India. The mechanics of supply and demand are quite simple: demand remains constant (and oil demand is relatively inelastic except in the event of major economic disruption as a few years ago); supply does not significantly increase to meet demand; price goes up. This is quite basic; if "speculation" plays any part in the price of oil it's a very small one and much less significant than the basic market forces of supply and demand. Blaming it on "speculation" is simply ignorant. (Americans don't have a god-given right to cheap oil; time to get used to it.)

[hunter]

17. If we could walk away from our cars OPEC would have nothing.

Cheap oil isn't a human right.