Saudi Arabia DID NOT leave OPEC

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Jeff-DSA

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Sorry if old, search turned up nothing: http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/11/the-death-of-opec.aspx

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.
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More at the link.
 
Cocopjojo said:
Somebody tell me what this means.
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OPEC members have just about oil in the world and don't properly compete with each other so as to stabilise oil prices... stabilise them high.
 
Cocopjojo said:
Somebody tell me what this means.
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OPEC is a monopoly. All the big crude exporters in the middle east have been setting export rates for a long time--meaning they controlled the price of oil rather than letting it be controlled by supply and demand. This means that the largest exporter (Saudi Arabia) will begin exporting however they see fit, which probably means they'll export more. More oil means lower prices. Other exporting nations might have to compete.

This could be really bad for environmental initiatives.
 
Wow.

This is about the best news the world could ever hear.


Folks this means competition in the crude oil industry and lower prices for all.

I think the Saudi's realized they were getting nowhere with OPEC.

Wow... I'm literally stunned.
 
Anerythristic said:
Honestly I wonder if they ever worry about the pace we are moving torward at least some oil independency?
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This is my biggest fear. All the progress we've seen of moving towards hybrids, and eventually electrics and more environmentally friendly fuel alternatives could be killed if gas prices go down.
 
Well, shows they could, for once, be scared of competition, at least enough to actually "compete."
 
Greed and competition kicks in. While OPEC members are selling their oil for $105/barrel, Saudi Arabia could sell theirs for $95 and make up the cash in quantity. At least in theory. We'll see how it plays out, but SA is a major player in OPEC.

Also, it's a kick in the nuts to those countries that want to control the price by limiting the flow.

CharlieDigital said:
It also means that "DRILL BABY DRILL!" is stupider than ever.
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No, not really.
 
Saudi Arabia did not "leave" OPEC. They are still part of the cartel, and- officially- support the cartel's production goals. They are privately stating they will not abide by OPEC's decision to cut production. Politically that's not as huge as the Saudis actually leaving the organization. The big political news is the fact that the Saudis and OPEC are at odds- typically the cartel does what the Saudis want, more or less. It represents a split inside the organization between those who want to avoid instability worldwide and believe maximum production advances that goal (the Saudis) and those who support instability in certain parts of the world and wish to use OPEC as a weapon to spark trouble (Iran, Venezuela) and those who just want to make as much money as possible (some of the others).

If Saudi Arabia did actually leave it would represent the rending apart of one of the organizations stabilizing the oil market. That's not happening. My source? The New York Times.
 
Dolphin said:
This is my biggest fear. All the progress we've seen of moving towards hybrids, and eventually electrics and more environmentally friendly fuel alternatives could be killed if gas prices go down.
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This. Anyone feeling happy about this news is thinking short-term.
 
CharlieDigital said:
It also means that "DRILL BABY DRILL!" is stupider than ever.
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This (potential event) has no bearing on whether a country should untilize all of their natural resources or not.
 
Dolphin said:
This is my biggest fear. All the progress we've seen of moving towards hybrids, and eventually electrics and more environmentally friendly fuel alternatives could be killed if gas prices go down.
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Uhh, Hybrid and other alternate fuel initiatives we're all started back when Oil was under $50 a barrel. I don't think the quest will alternative fuel will be killed by lower Oil prices.
 
Evlar said:
Saudi Arabia did not "leave" OPEC. They are still part of the cartel, and- officially- support the cartel's production goals. They are privately stating they will not abide by OPEC's decision to cut production. Politically that's not as huge as the Saudis actually leaving the organization. The big political news is the fact that the Saudis and OPEC are at odds- typically the cartel does what the Saudis want, more or less. It represents a split inside the organization between those who want to avoid instability worldwide and believe maximum production advances that goal (the Saudis) and those who support instability in certain parts of the world and wish to use OPEC as a weapon to spark trouble (Iran, Venezuela) and those who just want to make as much money as possible (some of the others).

If Saudi Arabia did actually leave it would represent the rending apart of one of the organizations stabilizing the oil market. That's not happening. My source? The New York Times.
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Oh.
 
Cheeto said:
Uhh, Hybrid and other alternate fuel initiatives we're all started back when Oil was under $50 a barrel. I don't think the quest will alternative fuel will be killed by lower Oil prices.
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:lol You're joking right? Have you checked SUV sales recently?
 
ToxicAdam said:
This (potential event) has no bearing on whether a country should untilize all of their natural resources or not.
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Sure it does given that environmental considerations are also factored into it and that is is to our strategic advantage to not use our own natural resources until absolutely necessary (due to price, due to war, due to regional instability in oil producing countries, etc).

Just because you have a load of ammo doesn't mean you blow it all in one skirmish. You use your ammo strategically when you need it most and when it will have the most effect. For the short term? Cheaper oil makes "DRILL BABY DRILL" idiotic. Likewise, just because we have oil, it doesn't mean that we should be in any rush to use it up; it's not like it's a renewable resource or anything like that. Once it's tapped dry, it's gone.
 
Evlar said:
Saudi Arabia did not "leave" OPEC. They are still part of the cartel, and- officially- support the cartel's production goals. They are privately stating they will not abide by OPEC's decision to cut production. Politically that's not as huge as the Saudis actually leaving the organization. The big political news is the fact that the Saudis and OPEC are at odds- typically the cartel does what the Saudis want, more or less. It represents a split inside the organization between those who want to avoid instability worldwide and believe maximum production advances that goal (the Saudis) and those who support instability in certain parts of the world and wish to use OPEC as a weapon to spark trouble (Iran, Venezuela) and those who just want to make as much money as possible (some of the others).

My source? The New York Times.
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.

should be repeated. the US now needs to beef up its SPR, and the EU needs to link up all its member-states SPRs)
 
Dolphin said:
:lol You're joking right? Have you checked SUV sales recently?
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Yes, and they're in the shitter.

CharlieDigital said:
Sure it does given that environmental considerations are also factored into it and that is is to our strategic advantage to not use our own natural resources until absolutely necessary (due to price, due to war, due to regional instability in oil producing countries, etc).

Just because you have a load of ammo doesn't mean you blow it all in one skirmish. You use your ammo strategically when you need it most and when it will have the most effect. For the short term? Cheaper oil makes "DRILL BABY DRILL" idiotic. Likewise, just because we have oil, it doesn't mean that we should be in any rush to use it up; it's not like it's a renewable resource or anything like that. Once it's tapped dry, it's gone.
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Cheaper oil doesn't make, as you so eloquently put it, "DRILL BABY DRILL" idiotic, as it still allows a country to ween itself off foreign oil sources, while the pursuit of alternative fuel sources are researched.
 
Cheeto said:
Uhh, Hybrid and other alternate fuel initiatives we're all started back when Oil was under $50 a barrel. I don't think the quest will alternative fuel will be killed by lower Oil prices.
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In fact, at this point we would be better served by cheaper oil. We need it to help build all of our alternative fuel vehicles and power plants.
 
Dolphin said:
:lol You're joking right? Have you checked SUV sales recently?
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Research and effort into alternative fuel has nothing to do with average soccer mothers being stupid with their money.
 
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