Opec wants YOU to pay more for gas

[The_ CaneCorso]

OPEC is determined to put an end to the relief at the gas pump. Concerned to protect their countries' financial health, oil ministers from the 13 members of the cartel of oil-producing countries meet in Vienna on Friday with only one item on their agenda — cutting their oil output in order to drive up world prices.



TIME and CNN

[The Ninja]

So does everyone else that makes money off of it. Its just like a corporation, they want you to pay as much as you would pay for their product as possible in comparison to their competitors. Who is OPEC's competitor?

[Danny]

its an old article. they already met (last friday). so far futures traders have given the middle finger to the production cut (1.5million less per day if i recall). the dollar is still gaining sooo much in value, its gonna be hard for commodities to make a come back without the dollar at least slowing down a little. just my opinion of course.

[Danny]

Who is OPEC's competitor?

problem numero uno i say headshot opec, and call it done

[Vteckidd]

still more reason to relieve our dependance on foreign oil

[SPOOLIN]

once again


We can send a man to the moon, or outer space for that matter

But we can't setup some drills and suck some liquid out of the deep underground in our own country.

[SL65AMG]

problem numero uno i say headshot opec, and call it done

if we damn drilled on our own soil opec would have a competitor!!! and we may be in a bit of a better situation....

[94ludeguy]

DRILL FTMFW. the US tries so hard to keep monopolies from happening and but the biggest monopoly in the world is in opec. makes no sense

econ 101... supply and demand. few or one supplier for that matter and prices will be whatever they want. we are the greatest country in the world and we are letting one organization pretty much control us.WTF

[94ludeguy]

DRILL FTMFW. the US tries so hard to keep monopolies from happening and but the biggest monopoly in the world is in opec. makes no sense

econ 101... supply and demand. few or one supplier for that matter and prices will be whatever they want. we are the greatest country in the world and we are letting one organization pretty much control us.WTF

[Total_Blender]

OIl is the same price no matter where its drilled from. Remember that OPEC sets the price that all oil, including US oil sells at. So in a way its advantageous to US oil producers because it allows them to jack prices. There would be no benefit for them to undercut OPEC. Most of the oil we do drill in the United States is sold outside the country. So we aren't even using what we produce now.

[tony]

Could the Drill Now people please tell without google how much of our oil comes from OPEC? Just curious...

[Danny]

OIl is the same price no matter where its drilled from. Remember that OPEC sets the price that all oil, including US oil sells at. So in a way its advantageous to US oil producers because it allows them to jack prices. There would be no benefit for them to undercut OPEC. Most of the oil we do drill in the United States is sold outside the country. So we aren't even using what we produce now.

i wouldn't go to as far as to say "OPEC sets the price of crude". They try to influence it as much as they can, but by no means do they start each day off by going "crude will be X$ a barrel today".

To all the drill now'ers, yes the increased supply would likely influence a lower price of crude. Although how much, if any, who knows. The problem lies with who is going to drill "now", cause it sure is not the American oil companies. They currently only drill a small percentage of the currently US approved drill sites. So how would approving more drill sites change anything dramatically, when we are not even drilling the approved sites right now?

-edited for typo-

[tony]

i wouldn't go to as far as to say "OPEC sets the price of crude". They try to influence it as much as they can, but by no means do they start each day off by going "crude will be X$ a barrel today".

To all the drill now'ers, yes the increased supply would likely influence a lower price of crude. Although how much, if any, who knows. The problem lies with who is going to drill "now", cause it sure is not the American oil companies. They are only drill a small percentage of the currently US approved drill sites. So how would approving more drill sites change anything dramatically, when we are not even drilling the approved sites right now?

What is/was your major in college or do you just research these subjects a lot?

[Danny]

What is/was your major in college or do you just research these subjects a lot?

sarcasm? im at ksu for business.

[rrutter81]

if i remember correctly, 3/4 trillion a year goes to foreign oil. Im not googling so i dont know. Anyway that is alot of our wealth we spend on energy.

Americans dont have to sell the oil on the foreign market. Take Alaska's oil pipeline for instance. We dont "have" to do anything. We arent even a part of opec, so we do not benefit. Im sure you can google the list of opec countries who signed up.

Crude does drop if we drill. Notice when Bush signed the waiver on the ban for drilling offshore? It set the drop from 147.00 oil. Within a week it hit 120s. The market is very "emotional" to changes and will react accordingly.

[Danny]

if i remember correctly, 3/4 trillion a year goes to foreign oil. Im not googling so i dont know. Anyway that is alot of our wealth we spend on energy.

Americans dont have to sell the oil on the foreign market. Take Alaska's oil pipeline for instance. We dont "have" to do anything. We arent even a part of opec, so we do not benefit. Im sure you can google the list of opec countries who signed up.

Crude does drop if we drill. Notice when Bush signed the waiver on the ban for drilling offshore? It set the drop from 147.00 oil. Within a week it hit 120s. The market is very "emotional" to changes and will react accordingly.

of course. You have to remember that the market was looking for a reversal at the time the the ban was lifted. And that gave the market a reason to reverse. All i am saying is that we never really know how news will be traded. I would agree, if the us started drilling a substantial amount, i think that news would result in lower prices. But right now the market is looking for higher crude and lower us dollar in my opinion (very short term), so any news to influence a lower crude price would not carry the same weight it did 4 months ago.

Just my thinking at least. Hope it makes sense, im not so good with the whole 'typing what i am thinking' deal


regards to my first post. the greenback has been taking a beating this week as expected. i would say its safe to expect higher crude, short term at least.

[Kyle]

Okay this is bullshit.

Evidence that they have enough money. When people can afford to fund dubai and all that bs, they maybe should just reallocate the money they have.


Oh not to mention $14 million dollar license plates.
http://abcnews.go.com/Business/story?id=4301197

Seriously, thats absurd.

[tony]

sarcasm? im at ksu for business.

Nah I was dead serious, I'm always impressed with what you post even if we disagree.

[tony]

On the drill now thing because of what OPEC is doing, the majority of our oil comes from Canada.. who is not a part of OPEC. 25% of what we consume comes from the US (Palin should know this more than anyone) and the rest comes from OPEC nations.

Its much, MUCH more complicated than just saying lets drill here now.. that is not THE solution.

[BlkCD5]

Natural gas.

[Danny]

Okay this is bullshit.

Evidence that they have enough money. When people can afford to fund dubai and all that bs, they maybe should just reallocate the money they have.


Oh not to mention $14 million dollar license plates.
http://abcnews.go.com/Business/story?id=4301197

Seriously, thats absurd.

Ya i agree. Its bullshit that the UAE is aloud to invest in thier country. What are you proposing we do? I wish people would stop saying the oil industry is making too much money, and get off thier lazy asses and take advantage of such a volatile market. Learn to trade oil futures, you can make enough money in a week to fuel your gas guzzler for years. Stop winning about a people profiting and figure out how you can induce competition in the market place, and how you can profit from thier profit (or thier losses too if u trade futures).

I actually commend the president of the UAE for what he is doing in Dubai. He is creating countless jobs, and actually allowing architects and engineers to dream HUGE, something that has not happened in centuries. He realizes his oil revenues wont last much longer, and he is doing something about it by creating if not the hottest, its a close second for the hottest tourist spot in the world. A industry that will support the UAE well after their oil runs dry (hopefully at least).

So again what do you propose we do?

[Danny]

On the drill now thing because of what OPEC is doing, the majority of our oil comes from Canada.. who is not a part of OPEC. 25% of what we consume comes from the US (Palin should know this more than anyone) and the rest comes from OPEC nations.

Its much, MUCH more complicated than just saying lets drill here now.. that is not THE solution.

according to our gov't (take it with a grain of salt) we get 53.8% of our imported oil from OPEC. (source dated 2007)

according to other none govt sources:

40% is local, 60% foreign

here is the chart
and yes i had to google exact numbers i only had rounded numbers in my head

[SampaGuy]

Ya i agree. Its bullshit that the UAE is aloud to invest in thier country. What are you proposing we do? I wish people would stop saying the oil industry is making too much money, and get off thier lazy asses and take advantage of such a volatile market. Learn to trade oil futures, you can make enough money in a week to fuel your gas guzzler for years. Stop winning about a people profiting and figure out how you can induce competition in the market place, and how you can profit from thier profit (or thier losses too if u trade futures).

I actually commend the president of the UAE for what he is doing in Dubai. He is creating countless jobs, and actually allowing architects and engineers to dream HUGE, something that has not happened in centuries. He realizes his oil revenues wont last much longer, and he is doing something about it by creating if not the hottest, its a close second for the hottest tourist spot in the world. A industry that will support the UAE well after their oil runs dry (hopefully at least).

So again what do you propose we do?

Thank you. I hate people that hate on people that are succesful.

[Danny]

Thank you. I hate people that hate on people that are succesful.

its just how people are being raised. they want handouts (not directed towards anyone specific here). very sad actually.

[tony]

Ahh.. touche, now I have to go back and look at the source I got my figures from. I was reading up on the subject out of curiosity one day. Give me a few

[Danny]

Ahh.. touche, now I have to go back and look at the source I got my figures from. I was reading up on the subject out of curiosity one day. Give me a few

nahh. i think ur were pretty close to right. remember that chart is IMPORTS only. so say 50% of our imports are opec, and 60% of our total consumption is imports. then a little over 30% the US total consumption should be through OPEC .

let me know what u find tony, i would like to see a country specific chart displaying the top 10 sources of oil we have. would be interesting.

off to a funeral, good luck with you search.

[tony]

Okay I stand corrected, read the data wrong.

http://www.eia.doe.gov/basics/quickoil.html

Canada is the largest single supplier to the U.S but OPEC nations as a whole account for 47% of all imported crude.

Nonetheless, I still stand firm that additional offshore drilling does not solve the problem since Oil is a global commodity. Alaska 3 of the top 5 oil fields but pay some of the highest gas prices in the country, by this theory of drill here drill now they should have the lowest gas bills around.

[Vteckidd]

i still think you miss the point of drilling tony.

Its not that we are going to drill ourselves out of this. Its that we will have some type of sustained oil for a number of years. We can reduce our dependancy by 10-15% by using our own oil. that alone would save us money.

Thats the whole point behind doing EVERYTHING, we cant possibly supply ourselves with the 20 billion barrels or whatever we buy a day, but what we can do is knock that number down to 15 Billion barrels, convert 20% of cars to run on CNG, use Wind an solar for buildings/communities

see what i mean, drilling is a piece of the pie, not the end all solution

[Kyle]

Ya i agree. Its bullshit that the UAE is aloud to invest in thier country. What are you proposing we do? I wish people would stop saying the oil industry is making too much money, and get off thier lazy asses and take advantage of such a volatile market. Learn to trade oil futures, you can make enough money in a week to fuel your gas guzzler for years. Stop winning about a people profiting and figure out how you can induce competition in the market place, and how you can profit from thier profit (or thier losses too if u trade futures).

I actually commend the president of the UAE for what he is doing in Dubai. He is creating countless jobs, and actually allowing architects and engineers to dream HUGE, something that has not happened in centuries. He realizes his oil revenues wont last much longer, and he is doing something about it by creating if not the hottest, its a close second for the hottest tourist spot in the world. A industry that will support the UAE well after their oil runs dry (hopefully at least).

So again what do you propose we do?

I clearly see the purpose of dubai.

They are exploiting the fact that they are the primary supplier of a product inelastic demand in the internatiol market.

I would be pissed with any industry in which prices rose and fell like this. If it was all natural factors like hurricanes effecting their ability then fine. Let's say milk producers decided they arent doing well enough and raised the price to $12 a gallon(yes its a shitty comparison I know there is a finite supply of oil), I'd be pretty pissed. I'm not bitter at the middle east, I'm bitter about what they are doing. Supporting your country is one thing, but claiming that 3 a gallon won't finance their expansion is absolutely ridiculous.

But at the current rate of expansion, I see little need to actually raise prices. Dubai and other such ventures began far before we paid $4 a gallon. Also lets see, they can raise their prices back 170% within a week because they are concerned about their nations health. Okay I understand that if it was just a dump over there, but any nation building cities like dubai is obviously not struggling. I think their is very little question about the health of their nation. They were doing just fine with get 2.50 a year ago, I am sure they will be fine with it today.

Understand that I'm not one of the ignorant people basing their entire view of our economy on our gas prices. I'm not one of those whiners, I am just discussing the matter, not griping

I can tell you have some sort of vested interest based on your reaction, so I realize trying to get you to agree with me might be useless but at least take this into consideration.

[tony]

i still think you miss the point of drilling tony.

Its not that we are going to drill ourselves out of this. Its that we will have some type of sustained oil for a number of years. We can reduce our dependancy by 10-15% by using our own oil. that alone would save us money.

Thats the whole point behind doing EVERYTHING, we cant possibly supply ourselves with the 20 billion barrels or whatever we buy a day, but what we can do is knock that number down to 15 Billion barrels, convert 20% of cars to run on CNG, use Wind an solar for buildings/communities

see what i mean, drilling is a piece of the pie, not the end all solution

Then we agree, drill now may be A solution but not THE. Alternative energy is THE solution while drill now is a backup.

[Vteckidd]

Then we agree, drill now may be A solution but not THE. Alternative energy is THE solution while drill now is a backup.

i would agree with that statement 100%

[STRteg]

This is an intense situation

[Danny]

I clearly see the purpose of dubai.

They are exploiting the fact that they are the primary supplier of a product inelastic demand in the internatiol market.

the beauty of selling a product that has inelastic demand (its not 100% inelastic, but its close enough).

I would be pissed with any industry in which prices rose and fell like this. If it was all natural factors like hurricanes effecting their ability then fine. Let's say milk producers decided they arent doing well enough and raised the price to $12 a gallon(yes its a shitty comparison I know there is a finite supply of oil), I'd be pretty pissed. I'm not bitter at the middle east, I'm bitter about what they are doing. Supporting your country is one thing, but claiming that 3 a gallon won't finance their expansion is absolutely ridiculous.

I think you price blame is in the worng area. I understand your point. But who exactly do you think controls the price, its sounds like your blaming it on the middle east because the "set the price" (which they dont directly do).

Ya 12$ a gallon milk would suck. Oil is so volatile because its the rage of the world right now. If milk powered the world then it would be the volatile one. Oh and trust me, if the milk people (or any commodity) could change thier price to what ever they want, they would.

But at the current rate of expansion, I see little need to actually raise prices. Dubai and other such ventures began far before we paid $4 a gallon. Also lets see, they can raise their prices back 170% within a week because they are concerned about their nations health. Okay I understand that if it was just a dump over there, but any nation building cities like dubai is obviously not struggling. I think their is very little question about the health of their nation. They were doing just fine with get 2.50 a year ago, I am sure they will be fine with it today.

They are doing just fine. But they will always cross thier fingers for higher prices. Can you blame them?

Understand that I'm not one of the ignorant people basing their entire view of our economy on our gas prices. I'm not one of those whiners, I am just discussing the matter, not griping

I can tell you have some sort of vested interest based on your reaction, so I realize trying to get you to agree with me might be useless but at least take this into consideration.

i understand your point. You think greed should be punished, which is fine. And trust me, greed is always punished, just not by government entities or regulations (well shouldnt be at least). Are the oil nations/companies greedy, ya I think i would classify them as that. But then again so is alot of other companies that manage to have a massive inelastic demand on thier products.

No vested interest here. If i didn't, i wouldn't care which way oil prices were going. You make just as much money when the price falls as when it raises. Although i may have a vested interest here soon, futures are something i want to break into soon.

So what do you think we should do to fix the greedy oil people? as much as i hate to say it (tony is gonna have a hay day with this): a US govt run drilling operation wouldn't be a bad idea. That way you do not have to count on dozens of US oil companies to drill what we need, when in fact all they do is sit around and limit supply. Have the govt owned drilling company produce set bbls/day to help influence the price of crude. and also they can use that revenues to help offset some of the taxes for small business (that 5% thats gonna get raped by obama).

That idea may work, but unfortunately our govt is not good enough to pull it off. It would be a dismal failure just like every other government entity.

[Danny]

Canada is the largest single supplier to the U.S but OPEC nations as a whole account for 47% of all imported crude.

hey thats down over 6 points from 2007 numbers cooool

[Kyle]

the beauty of selling a product that has inelastic demand (its not 100% inelastic, but its close enough).

Yeah, I mean prices have def. changed our consumption pattern, but not all that much.

I think you price blame is in the worng area. I understand your point. But who exactly do you think controls the price, its sounds like your blaming it on the middle east because the "set the price" (which they dont directly do).

It very well may be in the wrong place. I know they don;t completely control it, but I have no doubt that they have the power to make it $4.00/gallon after they meet in Geneva.

They are doing just fine. But they will always cross thier fingers for higher prices. Can you blame them?

Not at all.

i understand your point. You think greed should be punished, which is fine. And trust me, greed is always punished, just not by government entities or regulations (well shouldnt be at least). Are the oil nations/companies greedy, ya I think i would classify them as that. But then again so is alot of other companies that manage to have a massive inelastic demand on thier products.

Not so much, I'm not a liberal. The situation is semi-anologous to progressive taxes and the government deciding when you have enough money.

Every business is greedy, I can't blame them for looking out for themselves. But claims that they are concerned about their countries welfare bothers me, as it doesn't seem to be an issue by all indicators.

So what do you think we should do to fix the greedy oil people? as much as i hate to say it (tony is gonna have a hay day with this): a US govt run drilling operation wouldn't be a bad idea. That way you do not have to count on dozens of US oil companies to drill what we need, when in fact all they do is sit around and limit supply. Have the govt owned drilling company produce set bbls/day to help influence the price of crude. and also they can use that revenues to help offset some of the taxes for small business (that 5% thats gonna get raped by obama).

There is obviously no easy solution.

It's nearly impossible for us to control prices of import, as we don't directly control factors of production. The only way to stabilize the price of an import in my eyes is to produce it. I'm not suggesting that we go wild drilling in an attempt to get $3/gallon prices back, but if we were supplement our imports in times of need, say when prices are $4.30 a gallon, then we could give consumers some relief. I think making gas too cheap would be terrible and discourage the innovation which is weaning us from our dependency on oil. People are actually getting smaller cars for once, which is trend that needs to continue.

Like you said, it's a nice idea, but is destined for failure in this country. Europe could pull it off easily, not us though(imo at least).

[Danny]

Yeah, I mean prices have def. changed our consumption pattern, but not all that much.

yea, its measurable. but i agree, its not that much.

It very well may be in the wrong place. I know they don;t completely control it, but I have no doubt that they have the power to make it $4.00/gallon after they meet in Geneva.

if you think crude will run up after their meeting. why not take 3 grand, buy a oil future contract? if you ride the oil price from 65 bucks to 105 bucks, you can turn that 3 grand into 40 grand.

There is obviously no easy solution.

It's nearly impossible for us to control prices of import, as we don't directly control factors of production. The only way to stabilize the price of an import in my eyes is to produce it. I'm not suggesting that we go wild drilling in an attempt to get $3/gallon prices back, but if we were supplement our imports in times of need, say when prices are $4.30 a gallon, then we could give consumers some relief. I think making gas too cheap would be terrible and discourage the innovation which is weaning us from our dependency on oil. People are actually getting smaller cars for once, which is trend that needs to continue.

Like you said, it's a nice idea, but is destined for failure in this country. Europe could pull it off easily, not us though(imo at least).

i am tempted to say a steady stream of oil production inside the US (an increase) would help to some degree. but i mean when it comes down to it, u have to socialize the market to get it to work in your favor. and i dont think that is right either. i dont really want the govt effecting the prices of things anymore then they allready do.

this is the reason i am devoting 100s of hours to learning how to profit off these markets, i have given up on the govt doing the right thing. life isnt easy. not going to sit around and wait for gas prices that are not even that high to come back down to 80cents. just my mindset at least

[Kyle]

if you think crude will run up after their meeting. why not take 3 grand, buy a oil future contract? if you ride the oil price from 65 bucks to 105 bucks, you can turn that 3 grand into 40 grand.

I have the money but do I have the balls to do it... with the way my luck has been lately, I feel like I'm due for something good. I can't imagine the call home from college, hey mom I just lost 3k investing in oil futures. lol.

this is the reason i am devoting 100s of hours to learning how to profit off these markets, i have given up on the govt doing the right thing. life isnt easy. not going to sit around and wait for gas prices that are not even that high to come back down to 80cents. just my mindset at least

Not a bad idea, I am going to ask my finance teacher what he thinks of them. He has tried to beat the market plenty of times, so I'm sure he has some experience with them.

I may have to seriously look into this.

[Danny]

I have the money but do I have the balls to do it... with the way my luck has been lately, I feel like I'm due for something good. I can't imagine the call home from college, hey mom I just lost 3k investing in oil futures. lol.


Not a bad idea, I am going to ask my finance teacher what he thinks of them. He has tried to beat the market plenty of times, so I'm sure he has some experience with them.

I may have to seriously look into this.

im always looking for investing buddies to bounce ideas off of. my finance teacher emailed me the other night, saying he just added to his oil position.

there are mini contracts for futures, they are about $1500 for 'light sweet crude' if i recall.

futures are crazy risky, but at the same time. play em right and you can make more in a few days then normal jobs pay in months.

[chinitoxamor]

i sense another war coming up