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moboman
1000+ Penny Miser Member
USA
2555 Posts |
 Posted - 09/11/2008 : 12:50:38
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The death of OPEC
Posted Sep 11 2008, 07:01 AM by Douglas McIntyre
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Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.
As the world's largest crude exporter, the kingdom in the desert took its ball and went home.
As the Saudis left the building the message was shockingly clear. According to The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."
OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude as due to "over-supply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the US and EU for a time. That political battle is only at its beginning.
The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. That breadth of that deposit has now expanded.
OPEC needs that Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member it forfeits its leverage.
OPEC has made no announcement to the effect that it is dissolving, but the process is already over
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read some of the comments. Americans are soo dumb!
No one takes into account, what if the saudis switch selling in euros, they can do any number of things to cripple the US economy w/o having to listen to OPEC!
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"99% of all lawyers give the rest of them a bad name" 
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 09/11/2008 : 17:43:49
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Interesting read....
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/11/2008 : 17:56:51
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| The Saudi's, unlike most of the rest of OPEC, have vested interests in not crushing the US economy with excessively high oil prices, about $1.5- 2 trillion reasons..... |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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The Death of OPEC - saudis leave
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