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Opec Cut Production To Stimulate Demand


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In the Daily Telegraph business pages today Rowena Watson Writes "Opec...may have cut output by 4.3m barrels per day in an effort to stimulate demand......"

Can you Guru's please explain to me how cutting production of a commodity will stimulate demand....simple answers please.

Stockpiling.

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In the Daily Telegraph business pages today Rowena Watson Writes "Opec...may have cut output by 4.3m barrels per day in an effort to stimulate demand......"

Can you Guru's please explain to me how cutting production of a commodity will stimulate demand....simple answers please.

When supply is limited, price goes up. Simple.

These Islamic oil states were being choked out of existence with $30/barrel oil. Too bad it didn't continue IMO.

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When supply is limited, price goes up. Simple.

These Islamic oil states were being choked out of existence with $30/barrel oil. Too bad it didn't continue IMO.

the islamic oil states will never be cut out of existence...

they are the cheapest oil producers... simple... they have very deep pockets and will see out any problems long term.

thye are just maximising shareholder value and returns like any company does.

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the islamic oil states will never be cut out of existence...

they are the cheapest oil producers... simple... they have very deep pockets and will see out any problems long term.

thye are just maximising shareholder value and returns like any company does.

Ahh but do not forget that they hold their 'wealth' in US dollars. Nuff said.

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in other words production cut to stimulate the price...

hence higher margin... sigh's

Yes, i am not that thick, i understand the price will go up, but how does increasing the price of your product stimulate demand?

If i increase the prices of fuels, plastics fertilizers etc as a result of the oil price going up will I sell more product?

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Yes, i am not that thick, i understand the price will go up, but how does increasing the price of your product stimulate demand?

If i increase the prices of fuels, plastics fertilizers etc as a result of the oil price going up will I sell more product?

They want to be bubbled.

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High oil prices are good for HPC.

John Moulton (excellent) was on R4 this morning, mentioned that the rise in oil prices would completely negate government economic stimulus.

I avoid conspiricy theories but such large swings in oil prices can only be due to manipulation. (buying for storage/profit rather than use).

VMR.

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Guest Steve Cook
In the Daily Telegraph business pages today Rowena Watson Writes "Opec...may have cut output by 4.3m barrels per day in an effort to stimulate demand......"

Can you Guru's please explain to me how cutting production of a commodity will stimulate demand....simple answers please.

Production is not being cut to stimulate demand.

Production is being cut to meet demand on the basis that this will put a floor on prices.

If production is cut yet further, this will cause a rise in prices.

Edited by Steve Cook
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This was the most insightful answer.

Consumers of oil will bring forward purchases if they fear prices rising in future...then it becomes a self fulfilling wave.

with oil consumption falling in the USA and Europe, wont' there already be a physical increase in stocks anyway.

If purchasers are speculating on the oil price as you suggest and it is possible to forward purchase i assume on the futures market, then i can see the sense in buying at this time. Are there figures available which give current stockpiles in the US and elswhere.

and I still cannot see how these measures can stimulate demand vis-a-vis Rowenas column.

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You see goverment wants to protects us all by looking at our bank accounts and such like in case we give a few quid to the so called terrorists and yet nothing is said when the OPEC cartel puts the price up and the reason is simple it's because OPEC is a puppet of the Bush's and they want more cash.

When and if the yellow weeds of recovery give way to green grass then not only is oil prices going to hit you over the head but it's a tripple whammey of higher interest rates and taxes to pay for the banksters bailout.

Sorry but with all this coming up that housing carrot does not taste as good as it looks.

£5k p.a Council tax anyone

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High oil prices are good for HPC.

John Moulton (excellent) was on R4 this morning, mentioned that the rise in oil prices would completely negate government economic stimulus.

I avoid conspiricy theories but such large swings in oil prices can only be due to manipulation. (buying for storage/profit rather than use).

The chinease have been stockpiling huge quantities of oil over the last few months.

This is partly to replace stocks used to keep prices down when prices peaked 12 months ago, and partly because they are looking to turn their US dollars into something useful.

It's worth noting that the price of oil hasn't risen as much as it seems, it's just the US fed has trashed the value of the dollar.

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Production is not being cut to stimulate demand.

Production is being cut to meet demand on the basis that this will put a floor on prices.

If production is cut yet further, this will cause a rise in prices.

quoted for truth

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