Texsox Posted May 23, 2008 Share Posted May 23, 2008 QUOTE (southsider2k5 @ May 23, 2008 -> 10:50 AM) Which sounds really good in hindsight, but ignores the history of price targets that OPEC used to have. Hell their targets were in the range of where we are trading, minus $100. It makes much more sense that if prices had never gotten up that high in the first place, they would have stayed perfectly happy with crude oil in the range of the price targets, or a little higher. I'm kind of losing you here, could you elaborate? Link to comment Share on other sites More sharing options...
Balta1701 Posted May 23, 2008 Share Posted May 23, 2008 QUOTE (Texsox @ May 23, 2008 -> 08:59 AM) I'm kind of losing you here, could you elaborate? OPEC for the last 5 years has seemingly constantly had their "Price goal", the price they want oil to be per barrel, $30 or so below what oil was actually costing. They set it at $30 or so around 2000, it was still at around $30 when it was pushing $50 and $60, it was up to $50 and $60 last year when it was pushing $75 and $80, etc. There are 2 possible conclusions from this. One, Opec has simply lost the ability to control the price of oil because there's just not enough available to pump to meet growing demand, or two, their actions are simply not matching their rhetoric. Link to comment Share on other sites More sharing options...
southsider2k5 Posted May 23, 2008 Share Posted May 23, 2008 QUOTE (Texsox @ May 23, 2008 -> 10:59 AM) I'm kind of losing you here, could you elaborate? they used to manipulate supply to keep prices in the $25 range. They were perfectly happy at that point. If prices had never gotten to $50, $75, $100, $135, it is impossible to think that they would have altered their pricing habits above that point. Link to comment Share on other sites More sharing options...
kapkomet Posted May 23, 2008 Share Posted May 23, 2008 QUOTE (southsider2k5 @ May 23, 2008 -> 11:11 AM) they used to manipulate supply to keep prices in the $25 range. They were perfectly happy at that point. If prices had never gotten to $50, $75, $100, $135, it is impossible to think that they would have altered their pricing habits above that point. That for me is more the point. They are now getting paid $130 bbl. You think they ever will settle for $50 again? HELL no. We're stuck with this from now on, because even if demand really falls, they will cut supply to where they get $100 or so, which is "cheap"... Link to comment Share on other sites More sharing options...
Texsox Posted May 23, 2008 Share Posted May 23, 2008 Thank you. Wouldn't it then also be fair to say a producer in the US would also want to be paid similar prices? Link to comment Share on other sites More sharing options...
Balta1701 Posted May 23, 2008 Share Posted May 23, 2008 Wow, this is convenient thread timing. Senator "Tubes" Stevens in December seems to have requested that the Department of Energy undertake a study to see how much opening up ANWR would have dropped the price of oil. Their answer? $.75 a barrel. If Congress were to open up the Arctic National Wildlife Refuge to drilling, crude oil prices would probably drop by an average of only 75 cents a barrel, according to Department of Energy projections issued Thursday. The report, which was requested in December by Sen. Ted Stevens, R-Alaska, found that oil production in the refuge "is not projected to have a large impact on world oil prices." But the report also finds that opening ANWR could have other benefits, particularly in Alaska, where tapping the resources in the Arctic refuge could extend the lifespan of the trans-Alaska pipeline. It estimates that if Congress agreed to open ANWR this year, Alaskan oil could hit the market in about 10 years. "I'm coming away from it saying that this is yet another an indicator that opening ANWR is important to this country and to our energy future," said Sen. Lisa Murkowski, R-Alaska. Link to comment Share on other sites More sharing options...
jackie hayes Posted May 23, 2008 Share Posted May 23, 2008 QUOTE (Balta1701 @ May 23, 2008 -> 03:52 PM) Wow, this is convenient thread timing. Senator "Tubes" Stevens in December seems to have requested that the Department of Energy undertake a study to see how much opening up ANWR would have dropped the price of oil. Their answer? $.75 a barrel. That seems reasonable. Another article says: EIA said its projection is that ANWR oil production would amount to 0.4 percent to 1.2 percent of total world oil consumption in 2030. The figure is low enough that OPEC could neutralize any price impact by decreasing supplies to match the additional production from Alaska, EIA noted. Link. Just taking the midpoint, say that production would equal .8% of world production. Even if world supply in inelastic (roughly, OPEC doesn't offset new production by reducing its own), long-run demand elasticity is relatively high, so the effect will be less than .008*130 = 1.04 (taking 130 as a long-run price -- just ballparking). So that seems believable. Link to comment Share on other sites More sharing options...
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