Political Forums  

Go Back   Defending The Truth Political Forum > Political Issues > Money and Finance > Business & Industries

Business & Industries Discuss things going on in the corporate world, individual companies and corporate practices.


Thanks Tree23Thanks
Reply
 
LinkBack Thread Tools Display Modes
Old November 27th, 2014, 07:58 AM   #1
Senior Member
 
skews13's Avatar
 
Join Date: Nov 2012
Location: nirvana
Posts: 9,491
Oil Prices Plunge After OPEC Leaves Output Stable

https://www.google.com/url?sa=t&rct=...2jnj8oNpFRpnxg



The Organization of Petroleum Exporting Countries (OPEC) has decided not to reduce oil production, despite a huge oversupply in world markets. The decision caused global oil prices to drop further.

Following a meeting in Vienna on Thursday, OPEC announced it would leave its combined oil production unchanged at 30 million barrels per day.
The 12-nation oil cartel, comprising some of the world's biggest oil producers, overrode calls from weaker members to cut output in the face of global oversupply and falling prices.
After five hours of talks, Saudi Oil Minister Ali al-Naimi described the outcome of the meeting as a "great decision."
Gulf oil producers led by Saudi Arabia apparently won their case for keeping output stable in hopes of rendering production from non-OPEC members unprofitable, thus driving up prices in the long-run.

Oil prices fall further

Although an OPEC member, Venezuela is one of the countries suffering severely from the current low crude prices. It needs an oil price well above $100 (80 euros) per barrel to finance its national budget.

Venezuelan Foreign Minister Rafael Ramirez left the meeting visibly angry and declined to comment on the outcome.

However, oil prices have fallen by more than a third since June, as increasing production from North America in shale oil has overwhelmed demand at a time of sluggish global economic growth.

Shortly after the OPEC meeting ended, the price for Brent crude oil fell more than $3 to a fresh four-year low of $74.36 a barrel. US crude was at $71.07, down by about $2.

OPEC delegates agreed to meet again in June next year.

uhe/el (Reuters, dpa)
skews13 is offline  
Old November 27th, 2014, 08:25 AM   #2
Retired
 
highway80west's Avatar
 
Join Date: Mar 2007
Location: San Diego, CA
Posts: 17,108
Hey, if it helps me at the pump, wonderful. That makes Christmas shopping a little more affordable. And instead of having goose on the table, I can have turkey instead.
highway80west is offline  
Old November 27th, 2014, 08:32 AM   #3
I'm debt free
 
TNVolunteer73's Avatar
 
Join Date: Nov 2012
Location: Lebanon, TN
Posts: 36,340
you start making home grown pot, the dealers cut prices..


Supply and demand, they don't want us independent.
Thanks from coke
TNVolunteer73 is offline  
Old November 27th, 2014, 08:41 AM   #4
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 31,082
I think this is a medium term strategy by OPEC to cause higher and more stable prices. Although there is lots of variability in this, there does appear to be a weak but still a concensus that China and India will stabilize and return to growth, hopefully at a more manageable rate. There are signs that the worst is over for Japan. The US is doing better and better and Europe is at least stable and in a position to start growing again.

And the new oil is all shale oil which requires horizontal drilling and extensive frakking, both very expensive processes. So a lower price will in the short term slow down or stop new development of shale oil reserves. And the world's economy growing will increase demand and therefore oil prices. The OPEC countries with their existing production can fulfill this increase in demand and try and balance it to the point that prices don't increase enough to trigger another surge in shale oil development.

A complex strategy, but it has worked before.
Thanks from Guille
RNG is offline  
Old November 27th, 2014, 09:07 AM   #5
I'm debt free
 
TNVolunteer73's Avatar
 
Join Date: Nov 2012
Location: Lebanon, TN
Posts: 36,340
Quote:
Originally Posted by RNG View Post
I think this is a medium term strategy by OPEC to cause higher and more stable prices. Although there is lots of variability in this, there does appear to be a weak but still a concensus that China and India will stabilize and return to growth, hopefully at a more manageable rate. There are signs that the worst is over for Japan. The US is doing better and better and Europe is at least stable and in a position to start growing again.

And the new oil is all shale oil which requires horizontal drilling and extensive frakking, both very expensive processes. So a lower price will in the short term slow down or stop new development of shale oil reserves. And the world's economy growing will increase demand and therefore oil prices. The OPEC countries with their existing production can fulfill this increase in demand and try and balance it to the point that prices don't increase enough to trigger another surge in shale oil development.

A complex strategy, but it has worked before.

Supply and demand. We increased domestic supply, which lowered the demand for Middle Eastern oil.

Price corrected to meet the supply.
TNVolunteer73 is offline  
Old November 27th, 2014, 09:13 AM   #6
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 31,082
Quote:
Originally Posted by TNVolunteer73 View Post
Supply and demand. We increased domestic supply, which lowered the demand for Middle Eastern oil.

Price corrected to meet the supply.
Right, but this adjusted price won't support any new heavy oil development and not many shale oil plays, so supply will correct downwards, leading to higher prices. Throw in a bit of political uncertainty in producing nations and the roller coaster continues.
Thanks from waitingtables and imaginethat
RNG is offline  
Old November 27th, 2014, 09:24 AM   #7
Senior Member
 
skews13's Avatar
 
Join Date: Nov 2012
Location: nirvana
Posts: 9,491
Quote:
Originally Posted by RNG View Post
Right, but this adjusted price won't support any new heavy oil development and not many shale oil plays, so supply will correct downwards, leading to higher prices. Throw in a bit of political uncertainty in producing nations and the roller coaster continues.
There won't be any higher prices anytime soon, and if Saudi Arabia votes no to cut production again next year, the slide in prices could happen for a long time.
Sucks to be you if you're in the shale oil business. What I want to see are Republicans in this country try to sell to Americans paying higher gas prices is in their best interests, after selling to them energy independence. It isn't going to help their cause on finishing Keystone either. Or Canada's for that matter. Falling oil prices are also having the added benefit of strengthening the USD, while at the same time causing gold prices to plummet. Bad news for oil and gold speculators. Who a lot of are now losing their asses on investments they made last year. My heart just bleeds peanut butter for them.
skews13 is offline  
Old November 27th, 2014, 09:25 AM   #8
I'm debt free
 
TNVolunteer73's Avatar
 
Join Date: Nov 2012
Location: Lebanon, TN
Posts: 36,340
Quote:
Originally Posted by RNG View Post
Right, but this adjusted price won't support any new heavy oil development and not many shale oil plays, so supply will correct downwards, leading to higher prices. Throw in a bit of political uncertainty in producing nations and the roller coaster continues.
I think that is the point of the price cut. Price the competition out of business.
TNVolunteer73 is offline  
Old November 27th, 2014, 09:36 AM   #9
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 31,082
Quote:
Originally Posted by TNVolunteer73 View Post
I think that is the point of the price cut. Price the competition out of business.
A picky but significant point. They didn't cut the price, they can't do that without totally screwing up the system. They continued to produce at high rates which then has the effect of causing lower prices through supply and demand forces.

It is not a matter of price fixing or control, it is a matter of production control.
RNG is offline  
Old November 27th, 2014, 09:40 AM   #10
Banned
 
excalibur's Avatar
 
Join Date: Apr 2013
Location: The Milky Way
Posts: 24,581
Their production control is a bit of a farce as they produce more than they [OPEC nations in general] admit. Nonetheless their target: U.S. fracking. The government needs to make certain, and it is surely doubtful that Obama would do this, that there is no negative impact on increasing U.S. production. IOW, we need maintain certain price structure to keep our production growing, by whatever reasonable means at our disposal.

http://www.bloomberg.com/news/2014-1...coon-says.html

I see no reason to believe that any policy of the current administration has the interests of American production, we know that Obama hates oil. What will the 114th Congress do?


Last edited by excalibur; November 27th, 2014 at 09:49 AM.
excalibur is offline  
Reply

  Defending The Truth Political Forum > Political Issues > Money and Finance > Business & Industries

Tags
leaves, oil, opec, output, plunge, prices, stable



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
When an American leaves the Plantation Panther Racism 6 October 8th, 2014 10:18 PM
Liberia begins the long plunge hoosier88 Current Events 17 August 9th, 2014 06:08 AM
(FAUX Noise) Stable Of Bubbleheads; GROWTH! Medicine Man Current Events 3 March 19th, 2014 01:17 PM
Ice Sheets May Be More Stable Then Thought excalibur Current Events 125 June 6th, 2013 03:12 AM
Bloomberg leaves GOP CNN Current Events 3 June 20th, 2007 01:58 PM


Facebook Twitter RSS Feed



Copyright © 2005-2013 Defending The Truth. All rights reserved.