OPEC approves biggest ever output cut

You don't know humans very well, do you? We'll wait until the very last second before anything constructive will be done. And, just so you know, it's mostly due to the law of supply and demand ...as long as people are willing to pay the price, oil will be sucked out of the ground. When oil becomes too expensive, someone will come up with something to take it's place ....and they'll make a killing profit for it, too. Supply and demand, and the profit margins run virtually everything that humans touch.

Baron Max

 

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yeah, maybe if we had less humans.... there be a little more on the supply side.

 

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Not true - it is a good example of "supply & demand" in action.

What you might be referring to is Supply and Demand in a free market, whereas the oil market is a cartel, as you point out.

So while the mechanics are the same (suppliers, demanders, profit) the driving forces are different in that there is no competition among the suppliers.

In a free market (I think that is the right term, i.e. many suppliers and no collusion) the supply and demand is impacted such that the demanders effectively set the price - as if one supplier sets theirs too high then they don't sell. The overall demand in the market then is the determining factor of the price.

In a cartel or monopoly, it is the supplier that controls the price - generally to maximise profits - and this will be a function of demand. But in the absence of competition among the suppliers, the power is with them.

All supply & demand though - just different drivers.

 

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Big Cut eh?
Good. Less of their rubbishy worthless oil around.

 

Not 60 days ago.

 

Yeah
but that was 60 days ago and they were making us pay big.
Now they can stick their oil where the sun don't shine.

 

If they cut production enough they will cause an oil shortage as they once did in the 1970's.

 

I didn't think of that.

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And they again will stick it to the world where the sun don't shine!

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well the fault kind of also lays at the feet of the demander. perhaps if you like to eat, make your own food, or don't bitch when you have to pay the farmer and pay him big. right? we could have NOT driven monster trucks to the grocery story 3 blocks walk away sucking up 1 gallon of gas every 1/4 mile. we could have made electric car and put in public transport like trains and buses - like Japan. So, OPEC has every right in the world to bend over the rest of the world and stick it in deep.

 

Russia has just announced that the "Days of cheap gas are over".
For people in this country who have seen their energy bills double, so that Russian oligarchs can buy second best football teams, that's a joke.
The UK needs to be energy independent. And Green.
We could do it if we had the will to do it.


We are surrounded by cheap sources of power in wind and waves.
We need to spend money on renewables.
Then we can tell Russia to stick their gas back up their backsides.
And we can send the Saudis back to herding goats.

We are allowing these people to hold a knife to our throats,
and we have the means at our disposal to stop them.

 

OPEC is mostly irrelevant. Oil prices are driven by demand, not by supply.

But the worst thing is that if OPEC wants to play this game, if they can actually influence the price of oil, they'll only make it harder for the few customers that can still afford oil to buy it.

It's like you're the only store in town, and all your customers are going broke so you raise your prices.

Good thinking there... :m:

The price of oil should be at $20-$35. Anything above that doesn't reflect the true value of oil.