Jack Sparrow Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
PotNoodle Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
MarkyB Posted June 11, 2009 Share Posted June 11, 2009 in other words production cut to stimulate the price... hence higher margin... sigh's Quote Link to comment Share on other sites More sharing options...
MarkyB Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted June 11, 2009 Share Posted June 11, 2009 fuel prices at the pump have already shot up some 20% in a couple of months.... Quote Link to comment Share on other sites More sharing options...
Jack Sparrow Posted June 11, 2009 Author Share Posted June 11, 2009 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? Quote Link to comment Share on other sites More sharing options...
Injin Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
yellerkat Posted June 11, 2009 Share Posted June 11, 2009 Yes, i am not that thick, i understand the price will go up, but how does increasing the price of your product stimulate demand? It's just the reporting standards of our beloved media. Doubtless all new reporters now have a 1st in Meedja Studees. Quote Link to comment Share on other sites More sharing options...
Jack Sparrow Posted June 11, 2009 Author Share Posted June 11, 2009 They want to be bubbled. Its all clear now.. Rowena was referring to oil shares..................... Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted June 11, 2009 Share Posted June 11, 2009 They want to be bubbled. oh yes. Quote Link to comment Share on other sites More sharing options...
Guest Steve Cook Posted June 11, 2009 Share Posted June 11, 2009 (edited) 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 June 11, 2009 by Steve Cook Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted June 11, 2009 Share Posted June 11, 2009 Clever this, an oil price of around $95 is considered by some analysts to be recession inducing. So the more they manipulate the price upwards the more likely it is we'll have a recession. Quote Link to comment Share on other sites More sharing options...
Jack Sparrow Posted June 11, 2009 Author Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
Justice Posted June 11, 2009 Share Posted June 11, 2009 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 Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted June 11, 2009 Share Posted June 11, 2009 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. Quote Link to comment Share on other sites More sharing options...
Jay76 Posted June 11, 2009 Share Posted June 11, 2009 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 Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 11, 2009 Share Posted June 11, 2009 In other news, Choco production up .2%. Well done the workers of Birmingham Barracks. double plus good. Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted June 11, 2009 Share Posted June 11, 2009 make of it what you will but some NY traders say the correct price of oil should be $32 a barrel Quote Link to comment Share on other sites More sharing options...
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