Saudis want $75 per barrel

[AsburySkinsFan]

One more reason not to forget the need to leave these guys pumping black fluid that nobody wants to buy. This article should be retitled; "The Price Fix is in."

http://money.cnn.com/2008/11/29/news/international/opec.ap/index.htm?postversion=2008112910

OPEC to wait on output cut decision

Last Updated: November 29, 2008: 10:46 AM ET

CAIRO, Egypt (AP) -- OPEC ended a meeting Saturday in Cairo without announcing new output cuts.

The oil producing group's president, Chakib Khelil, said OPEC will wait until a meeting in Algeria on Dec. 17 to decide whether to cut additional crude supplies from the market.

Khelil says oil ministers of the Organization of Petroleum Exporting Countries "agreed to take any additional action on 17th of December to balance supply and demand."

His comments came after the group convened what it called a consultative meeting in Cairo to take stock of market situations and to asses whether members were complying with a 1.5 million barrel-per-day output cut announced Oct. 24 in Vienna, Austria.

Khelil said preliminary data indicates members are complying

The meeting took place after Saudi Arabia's king said the price of oil should be $75 a barrel, much higher than it is now.

Saudi Oil Minister Ali Naimi said the Organization of Petroleum Exporting Countries will "do what needs to be done" to shore up falling oil prices when the cartel meets in Algeria.

His comments came after Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.

"We believe the fair price for oil is $75 a barrel," he said, without saying how the price could be raised.

The price of crude stood at about $147 a barrel in mid-July. On Friday, the U.S. benchmark West Texas Intermediate crude for January delivery was trading at about $54 per barrel.

The king was echoed by Qatar's Oil Minister Abdullah Bin Hamad al-Attiya, who told the Arab news channel Al-Arabiya that prices needed to rise to guarantee investment into the oil sector.

"The price between 70 to 80 (dollars a barrel) is the one encouraging in investment and developing new or current oil fields," he said. "It falls below 70 (dollars), the investment would freeze, which will lead to a crisis in supply in the future."

The cartel has already held an emergency meeting in Vienna on Oct. 24 to announce a production cut of 1.5 million barrels per day.

The cut failed to stop the price drop, and the cartel hastily convened the Cairo gathering on the sidelines of the Organization of Arab Petroleum Exporting Countries' meeting.

"There is total confusion" among OPEC's 13 members, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co. in New York. "These people ... really have no business model. They basically thrive when oil prices go up, and now they are crying uncle when prices go down."

And down they have gone, in an avalanche sped along by a world financial meltdown that also threatens to cut deeply into OPEC member states' government budgets.

Kuwait's oil minister, Mohammed al-Aleem, said current prices could undercut investment in future projects and were not good for either producers or consumers.

The recent price drop has left OPEC price hawks Venezuela and Iran clamoring for further reductions of at least 1 million barrels a day. Both countries need crude at about $90 per barrel to meet spending needs aimed in part at propping up domestically unpopular regimes.

Other OPEC members, such as Nigeria and Ecuador, face budget problems too, making them reluctant to implement more cuts that might shrink revenues further.

The Saudis are better positioned to cope with the drop in prices. The International Monetary Fund estimates Riyadh needs crude in the range of about $50 per barrel for 2008 fiscal accounts to break even.

OPEC itself, along with the International Energy Agency, has significantly revised down its projections for demand growth in 2009.

Meanwhile, global crude inventories are growing, as evidenced by a U.S. government report showing a surprisingly large 7 million barrel build in stocks last week in the world's largest energy consumer.

OPEC's last round of cuts would put its total production at about 30.5 million barrels per day, according to the IEA. That is about 500,000 barrels per day higher than the forecast call on OPEC crude in much of 2009.

A Nov. 24 Oppenheimer research report says that for oil to rebound to $65 a barrel, OPEC would need to cut crude production by more than 3 million barrels per day from its September levels - a move it called highly unlikely.

[Teller]

Our friends in the middle east, the Saudis.

[Koolblue13]

I wish we could find somewhere else to get that drug from.

Screw SA in the ass. Your people attack us, your government funds those people and we give you 700 billion dollars a year. ****ing insanity.

[alex2792]

Well maybe if the big oil lobby didn't block every attempt to develop alternative sources of energy we wouldn't be so reliant on the ME.

[Teller]

Well maybe if the big oil lobby didn't block every attempt to develop alternative sources of energy we wouldn't be so reliant on the ME.

Or if congressional dems didn't keep us from using our OWN oil. (Whilst allowing China and Russia to use it, mind you.)

We can play the domestic blame game all day. But the fact remains that the Saudis are in NO WAY our friends, and barely, BARELY can be considered a weak ally.

[JohnLockesGhost]

They'll get what the market dictates. Or they can start eating it.

[Larry]

Screw SA in the ass. Your people attack us, your government funds those people and we give you 700 billion dollars a year. ****ing insanity.

Remembering that classic definition of insanity:

A mental disorder characterized by doing the same thing, over and over and over, and expecting different results.

[Teller]

Remembering that classic definition of insanity:

A mental disorder characterized by doing the same thing, over and over and over, and expecting different results.

And here's where we need President Change. (And I say that as someone who supports him.)

Every administration from Carter on (and I'm sure before that too) both dem and repub has been complicit in this crap. It's high damned time for it to stop.

[alex2792]

Or if congressional dems didn't keep us from using our OWN oil. (Whilst allowing China and Russia to use it, mind you.)

We can play the domestic blame game all day. But the fact remains that the Saudis are in NO WAY our friends, and barely, BARELY can be considered a weak ally.

It's not republican or democrat, ALL the politicians who have the power to set policy are bought and paid for by corporations who are focused on profits not what's best for the country or people. As long as there's oil left to pump we won't be seeing alternative energy going mainstream, even if breakthroughs are made they won't be reported by the media or ever get on the market.

[Koolblue13]

It's not republican or democrat, ALL the politicians who have the power to set policy are bought and paid for by corporations who are focused on profits not what's best for the country or people. As long as there's oil left to pump we won't be seeing alternative energy going mainstream, even if breakthroughs are made they won't be reported by the media or ever get on the market.

Yeah, the man is trying to keep good energy down.:doh:

Couldn't be that people aren't buying it, could it?

[Teller]

It's not republican or democrat, ALL the politicians who have the power to set policy are bought and paid for by corporations who are focused on profits not what's best for the country or people. As long as there's oil left to pump we won't be seeing alternative energy going mainstream, even if breakthroughs are made they won't be reported by the media or ever get on the market.

Doesn't every corporation on earth put the good of the company ahead of the good of the people?

Hell, it would benefit me to be able to buy a brand-new Porsche for 50 bucks. I don't think that would fit their business model too well though.

(And just like in my example, where the market dictated my making a different choice of vehicle, the market can and will do the same for energy.)

[Burgundy Burner]

Four months ago, $75 was a great deal and we would've welcomed it. At $75, gas at the tank could average about $2 to $2.25 a gallon. Again, far better than four months ago.

In the cooler months - gas at $1.50 to $1.75 a gallon

In the warmer months - gas at $2 to $2.25 a gallon

Sounds a lot better than $4.00 a gallon (or more) and oil at $145 to $150.

[alex2792]

Yeah, the man is trying to keep good energy down.:doh:

Couldn't be that people aren't buying it, could it?

People HAVE to buy it, fuel is essential to the function of our(and pretty much every other country's) economy. Yeah lets boycott oil and see how that goes lol.

[Zguy28]

I share the sentiments of the OP, but in all honesty, $75 for a BARREL of oil is actually pretty cheap compared to other consumer products.

A barrel is 50 gallons right? That's what, $1.50 per gallon of a product that has to be drilled, pumped, transported, refined, packaged, and transported again, then made available to the consumer at the pump. All along the way, somebody has to pay salaries to the workers who do each task.

As Jim Cramer said one time "in the 90's we became addicted to cheap oil. $3.00 a gallon is probably close to where its should be."

Gas is cheaper than milk and its a heck of a lot cheaper than Starbucks coffee which costs more for one gallon than a whole drum of oil costs.

[Koolblue13]

People HAVE to buy it, fuel is essential to the function of our(and pretty much every other country's) economy. Yeah lets boycott oil and see how that goes lol.

I was talking about alternative energy.

Can you explain to me the money you have saved using your own solar panels?

[JohnLockesGhost]

Doesn't every corporation on earth put the good of the company ahead of the good of the people?

One of the most beautiful things about free enterprise is that the good of the people and the good of the business are both achieved via mutually beneficial transactions.

A company cannot achieve a profit without pleasing its consumers.

[Koolblue13]

Gas is cheaper than milk and its a heck of a lot cheaper than Starbucks coffee which costs more for one gallon than a whole drum of oil costs.

They are all cheaper than water too.

[Teller]

One of the most beautiful things about free enterprise is that the good of the people and the good of the business are both achieved via mutually beneficial transactions.

A company cannot achieve a profit without pleasing its consumers.

Of course not. That was my point.

And when Tesla starts building cars that have the same performance, and go further than the grocery store and back, they'll compete with gasoline-powered vehicles.

[JohnLockesGhost]

Of course not. That was my point.

And when Tesla starts building cars that have the same performance, and go further than the grocery store and back, they'll compete with gasoline-powered vehicles.

Here's hoping. Their new roadster is bad-ass.

[alex2792]

Of course not. That was my point.

And when Tesla starts building cars that have the same performance, and go further than the grocery store and back, they'll compete with gasoline-powered vehicles.

Except even if they do they'll get bought out by a giant multinational corporation that will make sure that their car will never see the light of day.

[Koolblue13]

Except even if they do they'll get bought out by a giant multinational corporation that will make sure that their car will never see the light of day.

Yes that happened. No they are not all out to get you.

[Teller]

Here's hoping. Their new roadster is bad-ass.

Yes sir, it is.

*edit* And for the record, I DO believe that when we have better batteries, electric cars will become EXTREMELY competitive with gas-powered cars. Afterall, it's the torque that performance enthusiasts crave, and you can get WAAAAAYYYYY more torque out of an electric engine than a gas engine.

[alex2792]

Yes that happened. No they are not all out to get you.

I don't see why we're having this disagreement, in fact judging by your sig you are well aware that US and the world is ran by faceless corporations backed up by international bankers. They don't have the best interests of the people or our planet at heart.

[Koolblue13]

I don't see why we're having this disagreement, in fact judging by your sig you are well aware that US and the world is ran by faceless corporations backed up by international bankers. They don't have the best interests of the people or our planet at heart.

My point is big corporations are run by one thing. MONEY.

How do you spend yours? Do you have solar? Who is your energy provider?

I just hate to have a conversation about alternative energy, with somebody who only cries wolf and doesn't do anything themselves. It's frustratingly difficult to reason with people who blame our government for taking, while asking them to provide as well.

It's equally frustrating to take to anybody who thinks hindering our own production, under the guise of green, will help the planet, by having foreign countries do it for us.

[SkinsHokieFan]

Right now the Saudi's and OPEC have no control over the price of oil

Demand is collapsing worldwide. OPEC can cut production all they want, yet its not making a difference at all, and they know it right now