OPEC slashes production; crude continues to tumble

Looks like he saying EFFYOU, doesn't it? "EFFYOUY, we got the oil."

That's what I thought too. Great crotch-grab photo. I see a lot of this in Cleveland, but usually I think it's a way to pull up your pants.

Yes Urban culture has hit OPEC!

Yo we got the stuff that make you Go, So if you want Mo we gona jack it down so we wont be Po.

"You want crude? I got some crude for ya right here!"

I hear they are making a skrewed version of their latest OPEC dub tape. I DL the single the other night. It hits pretty hard.

Nuts to us I guess. Rich bastards.

If ever there was a reason to cut OPEC out of the American market---this is it.

We really need to have an energy policy, auto industry, utility supply which is independent of foreign manipulation----

The only problem is---OPEC is NOT just the Saudi princes-----there ARE American business interests involved in this as well----

It is an incestuous relationship----apparently alot of American corporations have no national loyalty to the country which provides the base for their operations and profit as well.

Everything and everyone is just a commodity....from which to profit.

It's somewhat comforting to see others had the same impression of that photo that I did. What a galling display.

He is a Saudi, they typically wear robes and that hitch is just a habitual move to hold the robe up when stepping onto or off something. Yall are reading way too much into the photo.

Am i the only one who saw Biggie Smalls in the back?

Kyle, that's an overcoat, worn over a suit.  It's not an Arab robe.

I know but he probably wears robes 95% of the time, the overcoat is robe-like, hence the habit.

for some reason i thought i might be the first to comment on that crotch grab photo when i saw it, so i eagerly scrolled down.  damn.

"Everything is worth what its purchaser will pay for it." ~ Adam Smith, the Wealth of Nations

If you pay for it, you have no right to complain about its prices.  Thats one of the defining features of Capitalism.

Theresa:

I get a kick out of his statement regarding the "unprecedented" fall in prices.

Uh, what about the "unprecedented" rise in prices?

What goes up, must come down.  And what goes up quickly, comes down quickly.

Just an excuse for them to take more money and more money.

Gamerk:

Got that right.  Everyone needs to really start to consider how to reduce, by 50% or more their use of oil and gas.  Really, can't be that hard.

gamerk2 the system can be gamed though when competitors are allowed to agree on production. Don't forget the oil market is not a capitalistic thing. It is opposite to Adam Smith's teachings because the supply side is oligarchically maintained and agreed on by most oil producing countries. If it was truly capitalistic then the price would always be lower until the supply "really" began to diminish. Also there are the refining oligarchies in various countries. America is no exception. Refining capacity has not increased since the sharp increase in gas prices. It has decreased creating a price bottleneck so that refiners can "skim off of the top" of the American economy. They can basically agree on output. It artificially inflates both gas prices and oil prices.

wmolaw you are right as well. The price especially for oil and gas futures for various reasons including African unrest and the Iraq war have inflated prices as well as increased specualtion which is fleeing the market right now. It is telling though that even with the speculation out of the market we are still at over $2 in gas prices. That is that refinery oligarchy I was talking about. Its like they are shoveling cash in their pockets. If the gas price were directly tied to oil we should be at or near $1.50. I'll do the math though and see.

msdx:

Good posts and points.

Oil prices were very low last decade in the 90s, the price was in the mid $20s. I'm not saying that as an excuse for them just a fact they didn't always have super high prices. By the late 90s to early 2000s other countries like China and India started seriously importing oil causing a huge price runup as supply, while increasing, wasn't increasing anything like demand was. Speculation that the trend would continue led to even more runup but when demand collapsed, or rather is thought to collapse, the price tumbles.

Refining has it's own bag of troubles. Refineries are built for specefic types of crude oil, oil isn't oil there are large differences in the stuff from place to place. Refineries built to process heavy sulfur containing crude that's shipped via ocean have to be on the coast and are more 'messy' thus suffer more environmental regulation. Those haven't been built in 30 years just maintained, they process stuff out of the gulf and South America. The refineries based on Texas sweet crude are different again but as no major production increase has occured in 30 years again they built no new refining capacity - what good would it do if there wasn't more sweet crude to pump into it?

Prices on gasoline are dropping and in a similar way to how they rose, quick but not overnight. Oil jumped $20 a barrell a day in summer but gas prices only drifted up a cent or two a day we are seeing the same thing backwards right now.

Since George Bush took office refinery (the business his family was in before politics) markup has increased by over 2000%. Thats a HORRENDOUS increase and is not solely explained by spikes in oil prices from OPEC. We need to start pointing fingers at the local culprits that have been strangling the American consumer. The refiners shoulder a HUGE share of the blame for both gas prices and economic suffering with increased cost to commute and increased cost of groceries. CHECK THIS OUT:

http://www.consumerfed.org/pdfs/gasoline1003.pdf

I know this was in 2003, but IMAGINE WHAT THEIR PROFIT LOOKS LIKE NOW. OMFG!

The publicly audited annual reports for all oil majors are online and easy to read. Any of them tell the story that refining isn't where they money comes from. I'm not saying they haven't had profit growth, but it's in production not refining. A little time, income statement, and calculator tells you the 2000% figure is absurd.

msdx,

Don't forget there hasn't been a new refinery built in US in 30 years.  Causes: environmental objections, NIMBY, etc.  Even a few new refineries could make a huge difference in gasoline price stability.  One proposal is to use abandoned military bases as new refinery sites.

As to natural gas, Russia, Iran, et. al., are proposing a cartel which could be very scary for Europe and Asia.

I think the rise in oil several years ago is mostly responsible for the mortgage and economic crisis now. The higher cost of gas and oil over the past few years made it more difficult for people to pay their mortgages, along with questionable loans. This was enough to begin this economic crisis and now the oil producers will pay with oil demand declining. It will be interesting to see how this affects Iran, Venezuela, and Russia.

LMAO at the post, but not at the gas prices :(

lol thanks.  Gas prices, I think, are the only silver lining in a season of storm clouds. I filled up the tank yesterday and paid $2.81 and that was at 7am.........at 5 pm......it had gone down to 2.72.

But with winter around the corner.......house heating gas I am sure is going to go orbital..........things will go back to $4 a gallon.

Sigh.

While the US may have cut back on it use, the rest of the world has not and is actually using MORE today than last year by 200,000 bbl a day.  The ‘demand’ may have slowed, but it hasn’t stopped or decreased overall.  OPEC also cut its output last month by 520,000 bbl a day and have seen prices slide nearly 41% since and cut another 1,500,000 bbl a day just this morning.  There is now 2,000,000 bbl a day LESS available oil while the world needs 200,000 more from last year yet we are watching the price plunge….why?   Investment money is leaving the commodities….that bubble burst back in July.  When most of that money is gone from the oil/commodity markets and only those who take possession of oil to make products (i.e. refiners, chemicals, airlines) with are left, the true laws of supply and demand will play out and set a more realistic price. You will pay below $2 a gallon by spring and there won’t be another spike for years to come.  The ‘investment money will find another sector of the market to create it’s next bubble.

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, and the year before that…

My logic is purely based on contrarian belief in that you can’t make money doing or believing what the herd does, basically what is told on the tube is a lie.  The herd believed we wouldn’t see $150 bbl….it happened.  When everyone was told that we are running out of oil and the high prices are here to stay, the herd believed it, hence the run on hybrid vehicles and the push for alternative energies, which is not a bad thing at all.  Now that the herd’s mindset is high oil (and other commodities), investors have started pulling their money knowing the price would fall.  Notice that a lot of people, both industry and general public are saying the drop in oil is temporary, again herd mentality.  If your 'hearing' that this price plunge is temporary and you hear it often enough, chances are it wrong.

absolutely right.wall street manipulation is what drove oil prices up to begin with.the bastards cheat to control prices regardless of supply and demand.this is not capitalism,and its worst than communism.it is corruption to allow certain zealots to control prices of products,for greedy proffits.the currant us govt. has its hand in this price manipulation as well.for now at least,the market is correcting itself.but still no accountability of the looters.

poor bastards bet the farm on oil staying at $100.00  now all we have to do is get jobs going, cut off aid to the foriegn countries that have no value to us and life will be good

OH yeah I so agree ! I think they should trade OIL for grain! Why should we the American people be held hostage when they have all the OIL and well we have all the grain yet we give them this grain for free ? no I say every time the price of OIL goes up then the price of grain should go up 2 fold and when they cut back on production then we do the same 2 fold ! I am sick of letting these rag heads get every thing from us and we get what ? that is right HATE and high prices ! Let them grow there oun food in that SAND PIT THEY CALL HOME ! I say stop all AID to every one ! NOW !!

HAHA riding my bicycle has paid off!!

Good for you!  How long is your commute and what is your route like?  A guy I know got his licencse suspended and had to use his bike for work and lost 50lbs getting around on it.  He said it was the best thing he ever did.  Still rides it.

If you look at the price of oil during the entire commodity boom/bubble (2003-2008) and compare it to gas, you will see that oil went up further in percentage terms as did gasoline.  Using what I watched happen in my area as an example…back when oil was trading around 20-25 bucks bbl, gas was about $1.30/gal (ah, the good 'ol days) for regular unleaded.  From that point oil went to the high we all know now as $147 bbl which translates to roughly a 600-700% increase.  Had gas increased as much, prices would have been as high as $7-$9 a gallon and my area saw $4.20, that is only (and I do use that loosely) a 320% increase, half the increase in oil. 

  Coincidently, when oil was rising between $60-90/bbl, gasoline prices hardly rose at all.  We are now again in that range but on the way down so I would not be surprised to see the price of gas level off until oil falls further.  FWIW, R/U gas in my area is around $2.65 this morning down from a high of around $4.20 back in July.  That's a 37% decline opposed to the 57% decline in bbl of oil.  I personally see think oil can 35-40 and you'll see gas under $2 (again, using my area) a gallon by spring and I will be willing to bet is stays there.  Do I think that we will get back to pre bubble levels….no because demand has legitimately increased across the globe since 2003 so to see $20-25 I think is wishful thinking.

Thomas:

We would be excoriated across the globe.  Not that I care, but we would be.

Hell, we were when we tried to use ethanol, "How could America make oil out of food that's needed elsewhere in the world."

Yeah nothing is wrong with him or Opec ! Seems like a fat cat making tons of cash . maybe they need a BAIL out as well ? Just look how that has help us ! We are so screwed up here we give so much cash to big fat cats and we suffer untold hardships and send food and aid and all kinds of great American innovation all over the world and get nothing at all for it . How screwed up is that ? And when on earth are we as a people going to wake up to this stuff ? when are we going to say enough is enough ? Is it going to take us going into a full blown depression to do this ? We are almost there folks !

The only negative to alchohol is that it burns with a colorless flame; a huge danger to emergency and rescue personnel in an accident.  Other than that, I see nothing wrong with the suggestion.  We can make alchohol our of grass clippings in a solar still.

But how would the government tax us for it?  To quote Shakespeare, "There lies the rub."

Thomas:

It is a bit bizarre that we give them aid, isn't it?

Yes it is and we do ! When they need more food who do they call ? when they have a natural disaster who do they call upon ? We give out MORE AID to countries that HATE us than we do to our own people , this makes me sick . We have people suffering HERE IN AMERICA and we give out more food and Aid to other countries than to OUR OWN PEOPLE ! And yet we pay higher prices for OIL than we should , We give them so much cash it is not even funny . Just what do we get from OPEC ??