Wednesday, December 5, 2007

A big oily spanner appears at the eleventh hour!!! – Could this stay the cut?

Opec expected to delay oil decision to March

Opec, the oil producers group that pumps 40 per cent of the world's crude, is expected to keep output levels unchanged despite strong calls from the West to increase production. Ali al-Nuaimi, the Saudi Oil Minister, told reporters at the start of the meeting: “There is nothing that justifies an increase or a decrease." A decision not to increase production is likely to result in oil prices climbing back to their record high of $99.29 a barrel on November 21, after cooling in recent weeks on expectations of an increase in output. This morning London Brent crude rose 57 cents to $90.10, while US crude was up 46 cents to $88.78.

Posted by tyrellcorporation @ 09:33 AM (575 views)
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7 thoughts on “A big oily spanner appears at the eleventh hour!!! – Could this stay the cut?

  • thats great news

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  • Planning4acrash says:

    OPEC are not putting of deciding to boost output, they are putting off the announcement that their oil production and certainly exports have peaked and will fall from now on. This is the biggest single piece of news since the 1750’s. Hows about rates at 10%, 20%, anything is possible once oil goes ballistic, and it will, you aint seen nothing yet.

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  • The question needs to be asked if they even can increase production. This announcement seems unusual to me – have OPEC taken this line in the past? – there is quite obviously a need to increase production, so why aren’t they doing it? I’m sure someone on here can tell me if i’m wrong or not.

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  • planning4acrash says:

    The only reason they aren’t increasing production is because they can’t.

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  • A very high oil price spike would be very bad news for everyone, even people trying to get on the housing ladder. One of the reasons they are not increasing production is they don’t like speculators driving up the price nor do they like being pushed around by oil hungry countries. You might say it is in their interests to have high prices but the downside ie increased risk of global recession would hurt oil producers very hard.

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  • planning4acrash says:

    Speculators are pushing up prices because they know that supply is tight. Speculators would not be inflating the market if they thought OPEC had capacity to increase supply. OPEC are not restricting supply to spite speculators, if they wanted to spite speculators they would flood the market with oil, thereby destroying investments in oil futures.

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  • The global economy depends on the adaptive functionality of these oilfields and yet, as Matt Simmons has demonstrated, a thorough inventory has never been undertaken – or (as far as we know) called for. The last I read about it, the Saudis were having to pump sea water in under high pressure to actually get the oil out. Doesn’t sound like a gusher in the prime of life to me. As planning4acrash says, they won’t increase production because they can’t. Sooner or later, with prices for the product rocketing, they’ll run out of cute reasons for not toeing the customary line over supply and demand..

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