Stop me if you heard this one already:
OPEC stands ready to cut yet more oil output at a meeting next month, its fourth reduction since September, to revive prices battered by the first demand drop in more than 20 years.A cut of around 1 million barrels per day (bpd) could be discussed by the organization's ministers at their March 15 meeting in Vienna, an OPEC source told Reuters.
The general problem with cartels, is that when you need them to work the most, they tend to be the least effective. It's not just that OPEC has lost credibility, it's that they have lost so much credibility that it strains the imagination to expect their cuts:
A. To be implemented without rampant cheating.
B. To be effective even if cheating is limited.
We think cheap oil is terrible as a general matter (at least this is our public view- secretly we don't). We think it brilliant during a deep and painful recession. We also think it temporary, but not because OPEC has anything to do with it.
Still, we have to wonder what an increasingly panicked OPEC will do. Should be entertaining.
OPEC ready to cut more oil to defend price [Reuters]
Posted by guest , Feb 04, 2009 10:09AM
If the Saudis would let their women drive cars, they could keep oil prices up.
Posted by guest , Feb 04, 2009 10:15AM
I say lets build some underground oil slurping device to suck these mofo's wells dry overnight while they argue with each other what price they need to sustain the ridiculous lifestyle of their lazy and useless people.
that would be the best day ever..
Posted by guest , Feb 04, 2009 10:20AM
If the Saudis would let their women drive cars, within 10 minutes all women would have left the country..
Posted by guest , Feb 04, 2009 10:22AM
The Saudis , OPEC and NOPEC were all stunned by recent US demand destruction for motor fuel. They were caught completely off guard. A 5% demand reduction nationally, y-o-y, collapsed gasoline from nearly $5.00/gal to $1.35/gal between July '08 and January '09.
The Saudis are scared shitless that the trend has lasted so long despite what global investment analysts have told them.
Posted by guest , Feb 04, 2009 10:24AM
Here's my question: why do we care that we import oil as opposed to producing it domestically? It's a global commodity - it's going to cost the same regardless.
If anything, we should be saving our domestic supply and tapping them dry so that we're the last ones to run out, not the first.
Posted by guest , Feb 04, 2009 10:32AM
"It's not just that OPEC has lost credibility"
OPEC had credibility to begin with?
Posted by guest , Feb 04, 2009 10:37AM
With a country like Nigeria as an integral part of OPEC what is this credibility you speak of?
Posted by guest , Feb 04, 2009 10:37AM
@5....that has been the strategic plan since the 1960s. In 1973, to punish us for supporting Israel during a short "war", they shut us off which was unexpected.
The recent admin was afraid of a shi'ia axis developing in Saudi, Iraq, and Iran and if the religious right in those countries wanted to do shut us off again, they probably would.
Of course, our own bankers have nearly destroyed us financially and I'm sure all of South Asia is enjoying Wall Street's efforts in that sphere.
Posted by guest , Feb 04, 2009 10:37AM
Too dependent on revenues, didn't cut output
Posted by guest , Feb 04, 2009 10:38AM
wake up and smell the camelfarts bitches!
Posted by guest , Feb 04, 2009 10:39AM
Prisoner's dilemma! OPEC membership is a prisoner's dilemma!
/poly-sci minor who's been wanting to use that term for a while
Posted by guest , Feb 04, 2009 10:43AM
Props to # 11...well played...very well played...
Posted by guest , Feb 04, 2009 11:07AM
@2, I like it.
"I drink your milkshake! Shhhhluuurp! I drink it up!"
-BeckyBootFan
Posted by guest , Feb 04, 2009 11:13AM
Hat tip to @3. Funny.
Posted by Bulging Bracket , Feb 04, 2009 11:30AM
#11 - learn to spell, unless you minored in several sciences, then you have my apologies.
Since when do poli-sci minors do something useful like look at game theory? That's a real subject that actual scholars investigate - math and engineering profs do work in the area, rather than ignorant arts faculty. My thesis had some applied game theory work in it.
And since the readership here actually has a clue, sit down and stop getting so excited when you actually recognize the problems being discussed here.
Posted by guest , Feb 04, 2009 11:59AM
@BB - Applied Game Theory? Is it possible to get a triple-ship in Galaga? I've wondered about that for over 2 decades...
http://www.youtube.com/watch?v=pu5d87ZhesY
--CS
Posted by guest , Feb 04, 2009 12:20PM
@BB,
Calm down; my post was a joke.
I bet your thesis was great.
-11
Posted by Anal_yst , Feb 04, 2009 1:25PM
@11/17
I'd give BB some slack, given the fact that every so often someone meanders around these here parts with similar comments, which they present very seriously. Hard to tell its a joke in text.
Posted by guest , Feb 04, 2009 3:09PM
The gov't should be buying as much oil as possible at these levels for a rainy day.
Posted by guest , Feb 04, 2009 3:13PM
@19 the Strategic Petroleum Reserve is already full up. You have to store oil really deep in the ground because the pressure causes leaks in the barrels. Maybe the next Obama public works project should be building more underground SPR chambers.