OPEC mulls move to Euro for pricing crude oil

[reprehensor]

I wonder why this didn't make major headlines in the U.S.? Mr Greenspan certainly didn't mention it recently, I wonder why?

The Neocons are leading us into a very dark alley, people. And they bloody well know it.

http://www.globeandmail.com/servlet/story/RTGAM.20040112.wopec0112/BNStory/Business/

"OPEC is considering a move away from using the U.S. dollar — and to the euro — to set its price targets for crude oil, the highest-profile manifestation of the debilitating effect of depreciation on the greenback's standing as the currency of international commerce.

Several members of the Organization of Petroleum Exporting Countries are seeking formal talks on using the euro, as well as the U.S. dollar, when determining price targets for crude, a senior oil minister within the cartel said Monday. “There are countries that are proposing this,” Venezuela's Oil Minister Rafael Ramirez said in Caracas. “It's out there, under discussion.”

Mr. Ramirez did not specify which OPEC members are pushing the proposal, but much of the impetus is believed to come from Persian Gulf producers.

They have seen their purchasing power in Europe pinched as the U.S. dollar loses ground against the euro — including touching a record low Monday."

More at link.
-------------------------------

Couple this with record-breaking debt and deficit, and you have a recipe for disaster. The super-rich will squeak by, the middle-class will be decimated, and the poor, well they will be even poorer.

If you need to do some catch-up research on Peak Oil, start here:
http://www.fromthewilderness.com/free/ww3/013004_in_your_face.html

[joeybee12]

1. Thanks for the post--if you really want to know what's going on in the

world, you have to search outside the major US media, OR, read Doonesbury!

[orwell]

2. Blah...Blah...Blah

Don't worry...deficits don't matter...we believe in a strong dollar policy...we're the strongest economy in the world...flipping burgers is manufacturing...we're going to create 2.6 million jobs this year...the check is in the mail...blah...blah...blah

O

[david_vincent]

3. Thanks

First I've heard of it. This is BIG.

[reprehensor]

6. BIG, big.

I concur.

[brainshrub]

4. Greenspan didn't say anything b/c this could cause a panic.

If oil was priced in Euros, the dollar wouldn't be worth the paper it was printed on.

Here is a brief explanation:

"When commodities are valued in dollars, the US needs do no more than print pieces of green paper to obtain them: it acquires them, in effect, for free. Once earned, other nations' dollar reserves must be invested back into the American economy. This inflow of money helps the US to finance its massive deficit.”

http://www.monbiot.com/dsp_article.cfm?article_id=572

[reprehensor]

5. ;)

I know, just being a facetious bastard. Let's get the word out.

[htuttle]

7. Oil is already priced in Euros -- they just haven't announced it yet

Look at oil prices per barrel in both dollars and euros for the last 2 years since Bush really started with his 'strong dollar policy'.

You'll see that while the price of a barrel of oil has been rising in dollars, when you figure in the exchange rate, it has remained steady at 23-24 euros per barrel since 2002. Ergo, the target cost of a barrel of oil for OPEC is probably around 24 euros per barrel. Euros, not dollars.

[reprehensor]

9. Facts, schmacts.

From the article...

"Any move to water down the use of the U.S. dollar as the currency would have enormous symbolic impact, said one prominent Canadian energy analyst.

“On a symbolic level, I think it's huge, not only for what it says about the U.S. dollar, but also the implied change to the nature of energy trading worldwide in the future,” said Wilf Gobert, vice-chairman of Peters & Co. Ltd.

Beyond the blow to the greenback's prestige, a move by OPEC to even partly price in euros would ensure that any further depreciation in the U.S. dollar boosts oil prices, Mr. Gobert said. And any country — not just the United States — using the U.S. dollar for pricing would see the cost of the commodity rise as that currency fell.

Indeed, while OPEC has yet to make any formal break with the U.S. dollar, its refusal to boost output has already offloaded much of the cost of the dollar's depreciation on to the American economy. Mr. Gobert said oil prices at the end of last month, about $32 (U.S.) a barrel, would have been much lower if not for the decline in the value of the U.S. dollar over the past 24 months. Using the exchange rates of the dollar versus the euro two years ago, crude would be selling for $22 a barrel instead, he said."

It's the symbolic impact that will frighten investors, the ones that are too stupid to realize how screwed this country is in terms of financing the debt that is going out of control. And if the Resident makes his Richie Rich tax cuts permanent, the shit will hit the fan.

Ten Trillion Dollar Balloon Clause
http://www.robertreich.org/reich/20040204.asp

[orwell]

10. Axis of Stupid

The dollar peaked the day after the "Axis of Evil" SOTU speech. Everyone got the message from the Boy King that Amerika was in the hands of a drunk driver and headed straight for the exits.

Who can blame them.

O

[reprehensor]

11. There is a song by Bruce Springsteen...

I'm goin' down, down, down, down.
I'm goin' down, down, down, down.
I'm goin' down, down, down, down.
I'm goin' down, hey-hey-bop-a-dee-dop-down.

And another...

It feels like I'm a rider,
On a downbound train...

[Norbert]

8. I heard last week this scenerio...

instead of cutting production but, of course, they did cut production. This bares watching.