These guys are trying to choke the US economy by silently offering less and less oil, pushing prices up and up.. even in times of recession..

"OPEC crude-oil supply will fall by 200,000 barrels a day, or 0.6 percent, to 32.45 million barrels a day this month, according to preliminary estimates from PetroLogistics Ltd. The group supplied 32.65 million barrels a day in January, data from the Geneva-based tanker-tracking service showed.

``We're getting evidence that OPEC is cutting production,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``This is a sign that they will further cut production even if they leave quotas alone next week.''"

They try to choke us then give our insolvent banks guido loans? If they choke us then how will they get their 14% loan payments? Or probably they have hedged somehow.

How are the Saudis going to defend themselves without us?

By the way, the recent action in the stock market has convinced me that I know absolutely nothing about how this all works.

I do not think US needs OPEC help with such a great FED&Treasury secretary.

Take a look at shorting natural gas...it's gone up to a 2 1/2 year high in sympathy with crude but the fundamentals are starting to crack.

Boz: It is simple. If the price of oil goes to $150 that is very good for the economy and the stock market will double from here.

Now you know the rest of the story.

You need to do some homework on the effects of Peak Oil.

And secondly, I don't think they would be dumb enough to purposely push the USA into a recession much less a crash. The last time we had a recession, oil dropped 30 percent in the first year. Not a lot of logic here.

I would also consider the fact that lots of people are piling into oil because they have been told over and over it is only going up from here. That is possible, but not where I have my oil bets as it's pretty clear we are at best on the verge of a major recession and at worst a replay of the 1930's. While you all are learning about Peak Oil (and pay particular attention to the Export Land Model) you might want to read the book, the Fourth Turning as well.

My bet is that by next year we will be in a depression and oil will be $50 a barrel. At some point in the future (5 years) oil will undoubtedly be north of $200 a barrel, but I don't think we're headed that way in the short term.

YMMV obviously.

"And secondly, I don't think they would be dumb enough to purposely push the USA into a recession much less a crash"

They're muslims, you expect them to think like rational human beings? They would be glad to push the infidel economies into recession.

> They're muslims, you expect them to think like rational human beings?

Yes.

How about scientologists?

Read "Twilight in the Desert" by Matthew Simmons....I honestly don't think they can produce more even if they wanted to. Four out of the five largest oil wells EVER are in decline or crashing as we speak....

Sony!,

Wow, you are an idiot. All these "muslims" are now second-generation, Harvard/Oxbridge educated lawyers and bankers, the same club of *******s that are running US into the ground. All you have to do is look at the Bin-Laden family and their long ties to all the oil boys here including the Bushes. Don't be ****ing ignorant AND racist. We have yahoo boards and right-wing talk radio for that kind of ****.

We are a spent shell of a country with an ideologically bankrupt leadership, I mean a bunch of Texas/Wall street pirates looting the treasury of both Iraq and the USA.

The heart has been pulled out of us, the body just hasn't hit the ground yet.

Sony1 wrote..

They're muslims, you expect them to think like rational human beings?

Yes. Except for this guy:



Actually I don't expect rational thought from anyone who takes religious ideas literally, be them Muslim or Christian.

First of all, what recession?

Second, to help the average investor feel better about it simply put an energy company and another bank in the index.

Third, AAA everything

problems solved.

They're not going to ramp up production because THEY BELIEVE we are going into recession and don't want a surplus.

And really, we buy their oil... what do you expect them to do with the money from that other than send it back as an investment?

Even religious folk are behaving rationally, they're just using a different set of assumptions than you.

One thing to bear in mind is, many of the OPEC countries have no love for the US. Countries like Iran and Venezuela would love to sink the US...anyone doubt that? All of them have multiple customers lined up, not hard to sell oil these days, in whatever currency...China or India would gladly suck up any excess production the US didn't take.
Recently Bush was in Saudi Arabia, and did he not deliver a cryptic message along the lines of, these folks may not be able to pump any more oil?

Peak Oil may indeed be kicking into gear...not good. Wish it was a fairy tale...

Gasoline retail sales are already down more than 8% in real terms, all of it going into storage instead. We saw this exact pattern prior to the 2001 recession.

OPEC is only trying to front-run an unavoidable slowdown and drop in demand, that's all. How well that - and the browbeating - works out for them remains to be seen. OPEC countries have a history of 'cheating' where some member country was pumping more than the agreed amount. In the last major oil crash, the Saudis even increased production as prices were falling in order to compensate for declining revenues. That may be more difficult this time as spare capacity is not as abundant as before.

Going into a recession, there is little reason to own oil from a demand side perspective. But there is reason to buy it from a supply-side perspective, especially if TSHTF in the Middle East or Nigeria. OTOH if the Chinese start up their own SPR and start trading in their Treasuries to fill those reserves the price will go up real fast.

If those assumptions directly contradict one's own experience of reality, I see nothing rational about it.

Ignorance and racism are the two most popular cultural positions here, after it's-not-really-gay-if-it's-for-vengeance ass****ing.

>Ignorance and racism are the two most popular cultural positions here

Pardon my curiousity, but since when did islam become a race? It's not even a religion, more like an "anti-religion".

True, Sony1...Richard Thompson is a Muslim! But it's all part of reducing dark-skinned ME people to "towelheads," even those who don't wear turbans.

Remember, finance is a gun and politics is knowing when to pull the trigger.

POINT A.
The Arabs have fully ratcheted shares in the US banks; they will be fine when the US banks have to float more shares and beg for more cash next year. As for paying their guido rates--the banks will jack up OUR FEES to make sure Guido gets paid.

POINT B.
The Arabs have tasted $100 USD oil and guess what: they like it. You will never see $50 oil again...at least not for any length of time that will matter.

POINT C.
The Arabs are discretely turning USD into other assets (in addition to their not so-discrete infrastructure projets).

POINT D.
Price inflation is crushing their people. They have to take better care of their people by mitigating price inflation through increased government spending, subsidies and eventually de-pegging from the USD.

POINT E.
The Arabs know there is demand destruction approaching in the US via the Depression. They can see it better than anyone else in the world because we are their major market (for now) and while our government may lie and bull**** us about market conditions, the Arabs have been in business for about 3,000+ years...they know how to read a market.

POINT F: Hell yeah they are going to turn down production (see point B and check today's USD index which is at 74.96). Leaving "Peak Oil" and their production capabilities out of the equation it jst makes good sense to reduce demand.


So to answer this thread, in my opinion, the Arabs are not crashing our economy on purpose. They are simply reading and reacting to the market. It's just business. Don't take it personal.

Dogfarm:

Dont think we will hit $50 again but we should go lower in the short term from here...

Also Middle East have increased consumption in their own countries at the moment in relation to oil for producing plastics and chemicals...(heard it somewhere)
Another thing there is talk in India about a $2500 car..Doesn thelp the case for $50 oil.
Not discovering any new wells either..