OPEC slashes production; crude continues to tumble

And your factual basis for this rather interesting economic theory is what?  Much more slander than substance to your comments.  Could you support this or are you just venting?

May the traitors be met with a traitors fate.

There go Pelosi, Reid, and Obama's windfall oil profits!  I wonder how they'll fund their plans for expanding federal government now?  I have a feeling it has to do with issuing more debt.

@Dev Null:

I think that they will do the same thing that has been going on since the 1970s. Every President since Jimmy Carter has "dipped" into Social Security and the Trust Fund to "borrow" billions to pay just the interest alone. Regan, Bush 1, Clinton, and Bush 2, all have borrowed Billions in tax-payer funds to support basic operations within the Federal Government. Obama's plan to beat up the oil companies is as far fetched as his economic recovery plan to work "from the ground up". Meaning, that people who pay no income tax will get additional money. People who pay income tax, and support jobs will increase in taxes. In other words, Obama is seeking socialism on a higher scale than anyone entering this office has ever thought about. I don't agree with OPEC's plan to cut fuel production, but they will feel a significant drop in the record profits they secured during the last 3 years.

Russia and Venezula will not be so prone to talk as much as they did when oil was almost 180 dollars a barrel. That amount of cash is slowly slipping away and they will be much more likely to settle down their anti-American spout at such reduced prices. Even Putin is seeking to become a little more friendly to the US.

Mac,

As much as this must kill the capitalism detractors, the fact is the US economy is what drives the entire world economy.  China this, Russia that....big deal, they get thier wealth from the money we spend.  China would be sh1t if we were not buying thier junk and Russia will be back in thier poor hole now that oil is heading back to where it should be...30-40 bbl, and it will stay there, that spike is over.

5% of the world population generating 25% of the world GDP.....no need to say more.

@CCdesign:

Yes, China sells the US a bunch of goods that we buy. This is one reason they have a budget surplus and a mountain of cash in their banks. One main reason that the Chinese military has had a sudden transformation from 3rd world to a modern military Armed Forces is the trade money that it has with the US. Whole other subject I know but your assessment is correct. China has money because of the US consumer. Russia ships a larger portion of oil to Europe, hence that is one reason that besides the UK and US, not many European countries said anything when Russia went trail-blazing into Georgia.

I am not against Capitalism. I would much prefer Capitalism then the failed attempts at Socialism. My grudge is that OPEC is attempting to cut production only to maintain high market quotes and push oil hedging for the price of a barrel of crude. Higher prices not from natural causes or foriegn policy, but just sheer greed. Why not let the oil market continue to drop lower and thus would increase consumer spending, lower food prices, and maybe encourage consumers confidence. We start causing the fuel prices to remain at 2.50 a gallon and above, then we are only going to slow the economic issues down even more. We were paying less for fuel not too long ago.

Mac,

OPEC can make all the attemts they want to halt the slide in oil by cutting production.  Just a few months ago they made a production increase which was one of a few during the price spike in an attempt halt the dramatic rise.  Not that they wanted to, they just bowed to the US pressure to do so.  Thing is, there was enough oil on the market before ANY of thier production increases so they all they did was oversupply the market for actual use.

At the time, there was a ton of ivestement money pouring in to the commoditity markets particularly oil, enough so to cover what was really of glut of oil on the market.  Everyone has come to know them as speculators but I prefer to call them large investors as the former have always been in the market and used to actually take delivery of a product....that's another story though.

OPEC had made cuts and bumps in thier production in an attempt to control the price of oil since it was formed.  That does not always work and sometimes nothing changes.  The price if oil is more closely controled by the amount of money invested in the market....more so than anything else.

In 2003. there was 13 billion dollars of ‘investment’ money in oil for those not taking delivery (you have come to know them as speculators) and oil was at 20-25 bbl.  By July of 2008 that amount had grown to 260 billion and oil was at 147 while world demand increased by only 5%.  That is a 600%-700% increase in price for a 5% increase in demand.  At best, demand like that can be called ‘Speculative Demand” not actual demand.  While the US has cut back on it use, the rest of the world has not and is actually using MORE today than last year by 200,000 a day.

OPEC also predicts that next year (2009) the world will need an addtional 800,000 a day.  IF the days of 'cheap' oil is supposedly gone and the word is going to need so much more next year than this, the the plunge in price....Investement Money.

@CCdesign:

Your assessment is valid and I appreciate that bit of information. My knowledge on the whole world economics is not is large as it should be so if my statements were off then  I freely admit that I made an error in judgement. Hence, like anyone else, I want the fuel price to be as cheap as possible. I know that people need to sell oil, and that many countries that before did not use much oil, is now using a considerable amount. But the price increase and the on-going yo-yo effect leaves most people scratching their heads wondering what is actually causing prices to shift from extreme high back down? Is there so much of a market that one word from OPEC can now shift the price of fuel from 20 to 40 cents a gallon over-night? It seems more on the surface that the oil traders seem to have more pull than the OPEC senior leadership on the price of crude.

Mac and CC,

Suffice to say, oil is not a free market!

Having spent some time in Kuwait, Saudi Arabia, and Iraq, the idea that OPEC is cutting oil production to save their economic integrity is false. OPEC is all about making huge profits and the fact that Americans were paying 5 dollars a gallon and building the bank accounts of several countries wealth, only proves that the majority of prices is based not on fact but greed. Though the amount of consumption was higher with people buying more cars than riding bikes in India and China, the idea that several years ago we paid just at 1.00 dollar and now we see the price jump at the drop of a hat, leaves many people wondering just how these prices are created? More like pulling a number out of the air to ensure you will get paid. We paid less than a dollar during the 1990s. We were paying less than 2.00 dollars before Katrina.

OPEC is worried that they won't be getting that large sum of cash like before. Instead of allowing prices to go down to encourage more spending and lower food prices, these countries want more money. Such actions will only slow down any economic growth and reduce the ability of the US dollar to regain value.

James Nickerson - just so ya know.....starting at the top I counted 5 pic comments and 40 with no pic comments at all....don't tar everyone with the same brush.... (I got tired after 45) LOL

I'm just sayin....

I would argue that high oil prices are good for America in the long run, because low oil prices will inhibit investment in alternatives. Drive the price up and we will conserve more... the more we conserve, the less wealth we transfer... the less wealth we transfer, the more we have to invest in domestically-produced alternatives... the more we invest in domestically-produced alternatives, the better off we will be.