Author Topic: OPEC confirms that it has lost control of the price of oil  (Read 3519 times)

K Frame

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OPEC confirms that it has lost control of the price of oil
« on: December 17, 2008, 11:24:25 PM »
OPEC met today and cut production by 2.2 million barrels a day, or more than was expected, in an attempt to shore up the price of oil.

Oil, which had been UP as much as $1 or so a barrel in trading before the meeting's announcement, immediately plunged on the news, and finished the day at slightly over $40 a barrel.

In Thursday day trading on the Asian markets?

Oil has continued to fall, and is now trading below $40 a barrel.

It's going to be interesting to see what happens when the US mercantile exchanges open tomorrow.

Don't you love it that OPEC has totally lost the ability to influence the price of oil?

I know it makes my heart glad!
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Zed

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #1 on: December 17, 2008, 11:35:42 PM »
OPEC met today and cut production by 2.2 million barrels a day, or more than was expected, in an attempt to shore up the price of oil.

Oil, which had been UP as much as $1 or so a barrel in trading before the meeting's announcement, immediately plunged on the news, and finished the day at slightly over $40 a barrel.

In Thursday day trading on the Asian markets?

Oil has continued to fall, and is now trading below $40 a barrel.

It's going to be interesting to see what happens when the US mercantile exchanges open tomorrow.

Don't you love it that OPEC has totally lost the ability to influence the price of oil?

I know it makes my heart glad!

Typical they only admit to it when Oil prices Plummet eh?
Si vis pacem, para bellum. (If you would have peace, prepare for war.)

charby

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #2 on: December 17, 2008, 11:49:51 PM »
I'm going to buy that 8x8 half track 12 ton hemi SUV this weekend.
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Bogie

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #3 on: December 17, 2008, 11:59:19 PM »
Charby, don't be shy... Make it a dually...
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charby

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #4 on: December 18, 2008, 12:09:57 AM »
Charby, don't be shy... Make it a dually...

And my truck nuts assessory will be made of iron and not cheap plastic from China.

http://www.truck-nuts.com/albums/album_image/2648354/772889.htm
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Zed

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #5 on: December 18, 2008, 12:23:02 AM »
And my truck nuts assessory will be made of iron and not cheap plastic from China.

http://www.truck-nuts.com/albums/album_image/2648354/772889.htm

they make Iron ones?
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Nitrogen

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #6 on: December 18, 2008, 12:24:34 AM »
Anything that pisses off OPEC is tolerable in my book.
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Zed

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #7 on: December 18, 2008, 12:59:22 AM »
Anything that pisses off OPEC is tolerable in my book.

+1000
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K Frame

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #8 on: December 18, 2008, 02:12:06 AM »
Typical they only admit to it when Oil prices Plummet eh?

Notice how I never said the word "admit."

As in, no one from OPEC ever said that they had lost control.

But, their action was intended to put a floor under the price of crude oil, and it was a fail. Their actions, followed by the collective yawns of commodities traders, was the confirmation.
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Headless Thompson Gunner

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #9 on: December 18, 2008, 02:28:14 AM »
Interesting times, no?

Most of the opec regimes need a minimum oil price of something like $75 to $100 per barrel in order to survive economically.  The fact that opec can't hardly keep oil in the forties, despite production cuts and a falling dollar, is an interesting omen.
« Last Edit: December 18, 2008, 02:38:16 AM by Headless Thompson Gunner »

Gewehr98

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #10 on: December 18, 2008, 03:47:14 AM »
Quote
And my truck nuts assessory will be made of iron and not cheap plastic from China.

They should be made of brass.   =D

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Waitone

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #11 on: December 18, 2008, 04:22:23 AM »
Quote
The fact that opec can't hardly keep oil in the forties, despite production cuts and a falling dollar, is an interesting omen.

Understated!  The futures guy are painting a bleak future.
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Firethorn

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #12 on: December 18, 2008, 08:31:22 AM »
They should be made of brass.   =D

Either Depleted Uranium or Tungsten.

charby

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #13 on: December 18, 2008, 08:43:22 AM »
They should be made of brass.   =D



They sell brass ones too.

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jamz

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #14 on: December 18, 2008, 08:51:43 AM »
It also embiggens my heart is that it affects Chavez in Venezuela, too.  =D
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myrockfight

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #15 on: December 18, 2008, 09:03:01 AM »
OPEC needs to get its head out of the clouds, or the sand, and realize that they are only a singular market force, albeit a significant one, that can only influence oil prices. They do not have control, nor have they ever had control over the oil price.

Oil prices are more influenced by OPEC during less tumultuous economic times. Traders, another significant market force, are simply less inclined to react to them right now. The bottom line is that the major purchasers of oil have decreased their consumption at a rate higher and more quickly than OPEC is cutting. Or at least that is what is being peceived by the traders. They are seeing a huge pile-up in inventory and reacting to it. The energy traders have the most immediate influence of the price of oil.

There is also a huge amount of speculation in the oil markets right now. Whenever the price of a commodity starts fluctuating rapidly, the volatility brings in traders that would not normally be trading it. Why? They want to make money and they know that there are probably going to be people 1. Panicking and 2. Making stupid mistakes and 3. Trading irrationally. They also know that there will be a bunch of other traders coming in who don't have a lot of experience in trading oil futures, which compounds factors 1,2, and 3. It is kind of a self-fulfilling prophecy. But, it is something that all markets, which allow speculation, have to deal with.

If you want an example, look at the NASDAQ and the NYSE during the early Dot-Com years. You can take the above paragraph and make a few word changes and come out with the exact same result. You had all kinds of people "day-trading", you also had unparalleled amounts of firms devoting a large amount of resources (ie. capital and man hours) because there was money to be made.

Quite frankly. I would love to know where the financial industry comes up with these "experts". They almost always end up making themselves out to be complete morons, making predictions and then betting the farm on it. It really does baffle me. I don't know if they are just so afraid of making there own individual predictions that they can't stray from the pack or what? One theory is that if they stay with the majority of the analysts there is security. If they are wrong they just say, "Well no one could have predicted that. Look. Everyone else got it wrong too."  I used to see it a lot with individual stocks. You could do your own technical analysis and fundamental analysis and come up with where the security was likely head in the next couple of quarters (at least). I would just shake my head and marvel at their collective stupidity sometimes.

It also embiggens my heart is that it affects Chavez in Venezuela, too.  =D

Amen to that. That guy is doing his best to upend democracy in that country. It is a shame.

Scout26

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #16 on: December 18, 2008, 11:34:18 AM »
It also embiggens my heart is that it affects Chavez in Venezuela, too.  =D

He'll scream that it's all a norteamericano plot while his country implodes economically (also due to it's socialist model.....yea, yea, I know, someone will be by shortly to tell me that it's not "True" or "Real" socialism....)

Plus the other problem with OPEC cutting production is that they tend to cheat....  They expect to get X number of $ to prop up their economies....If they cutting Y production doesn't generate X revenue, thn they increase to Z production to get to X revenue.   

Amazing ain't it...  That no matter how much anyone tries, they still can get away from Adam Smith and Supply/Demand curve...... ;/ =D
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K Frame

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #17 on: December 18, 2008, 06:18:42 PM »
And oil for the January contract delivery (which expires for tomorrow) was down to $36 and change.

The February delivery contract is holding its own a little better, but not much.

Some analysts are now saying that oil at $25 a barrel isn't out of the question.
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thebaldguy

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #18 on: December 18, 2008, 06:33:09 PM »
OPEC is a group that tends to be independent. They may agree to lower production, but only at the cost of their own revenue. My hunch is that several countries sell oil "under the table" to raise money in these economic times.

Tallpine

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Re: OPEC confirms that it has lost control of the price of oil
« Reply #19 on: December 18, 2008, 09:08:56 PM »
The good news is that gasoline will be cheap.

The bad news is that nobody will have any money to buy it.
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