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OPEC to make sure oil does not go below $100/bl = airlines will never be profitable?

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This is an example of how drill, drill, drill won't work. We can produce more oil, but opec will just cut capacity to keep prices inflated. And the gentlemen above is correct, our oil companies will sell the oil at the current price, to whatever nation needs oil. It is not "our" oil.

Plug in hybrids will destroy demand if sold around the world.



So Hybrids are the answer but drilling isn't? That's ridiculous. Drilling can help for 2 reasons, one is that it increases the percentage of our oil going to the world market, making us a larger factor in the demand equation, two it keeps more money 'in house' lessening the overall impact of our reliance on foreign sources. Yes, OPEC may cut production to keep the overall supply the same, but again, our increases change the dynamics completely. Far more than a few hundred thousand hybrids taking to the road. But as most people realize, there are many parts to this equation. Why take something completely off the blocks when a combination of strategies will be more effective. More hybrids, more drilling, more wind, more nukes, etc.

If you can name ONE SINGLE reason why drilling more is bad, I'd love to hear it... Is it the environmental impact? That's hypocritical if we're talking about a global energy source, what, let others do it over there but not in my backyard? How arrogant. Seriously, what is the problem with drilling?
 
"Will airlines ever be profitable?'

Why would they, they never have. The only thing that has changed is the blatancy of the management theft and total lack of effort. Neither of those has anything to do with the price of oil. It is more a matter of the total lack of effective government oversight.

I know I will get hammered by all of you that think "the market" and "pure capitalism" should determine everything. That's all well and good, but it assumes people (management) have good intentions, ethics, and morals that they will assert on their own. THIS IS NOT THE CASE!

PIPE
 
glass parking lot! ;-)
 
OPEC tried to increase supply via the Saudi's when prices were climbing to the $140's. It didn't work. Why then can they control prices from dropping? As long as they are known to have the capacity to produce, I don't think that their actual production output is of much consequence.
 
So Hybrids are the answer but drilling isn't? That's ridiculous. Drilling can help for 2 reasons, one is that it increases the percentage of our oil going to the world market, making us a larger factor in the demand equation, two it keeps more money 'in house' lessening the overall impact of our reliance on foreign sources. Yes, OPEC may cut production to keep the overall supply the same, but again, our increases change the dynamics completely. Far more than a few hundred thousand hybrids taking to the road. But as most people realize, there are many parts to this equation. Why take something completely off the blocks when a combination of strategies will be more effective. More hybrids, more drilling, more wind, more nukes, etc.

If you can name ONE SINGLE reason why drilling more is bad, I'd love to hear it... Is it the environmental impact? That's hypocritical if we're talking about a global energy source, what, let others do it over there but not in my backyard? How arrogant. Seriously, what is the problem with drilling?

I don't see a real big problem with drilling. However...wouldn't it be smarter as a society and a nation to maybe start a movement away from oil alltogether? Drilling is really a band-aid fix in my eyes. Drilling more is not the ultimate answer. However, it might be a temporary fix. I was once told that oil was a finite resource...so if we really did come up with an alternative (in-house), wouldn't that in the end make things better? Could you imagine the day that the United States of America is completely self-sufficient in it's energy needs? A combination of oil (just not as much), hybrid technology, and other concepts (synthetic fules, natural gas, wind etc...) could result in us not buying crap from anyone else. That, to me, is worth more than drilling, drilling, drilling. We consume soo much oil that the amount we would need to drill to make a dent is really trivial. All of those resources could be used to find a long term fix. Making the biggest oil consumer on Earth less dependent on oil would be awesome. OPEC could then kiss USA's rear...and ultimately our connection with the middle east can be cut. That's why drilling isn't the answer. At least not the ultimate answer.

By the way...did I hear correctly today that Iraq signed a deal with China for oil? Yes...we spend billions of dollars on that pit and in turn they sell their oil to China. Nice work, I wonder if that's what Bush had in mind when we invaded the place. How ironic.
 
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I look foward to, and hope I'm around to see the world get off their collective a$$'s and employ enough other technologies to render oil to the backstage of necessities. There is nothing more that I would like to see these countries that live and die on oil - well.........................................I think you get the idea.
 
(pushes glasses up on nose) Anyone remember their econ class in college?

With regard to the supply & demand of oil, and OPECs role in this, it helps to know just how OPEC is able to control pricing through production and why it doesn't always work.

(cut/pasted from cliffnotes, italics added):

"Cartel Theory of Oligopoly
A cartel is defined as a group of firms that gets together to make output and price decisions. The conditions that give rise to an oligopolistic market are also conducive to the formation of a cartel; in particular, cartels tend to arise in markets where there are few firms and each firm has a significant share of the market. In the U.S., cartels are illegal; however, internationally, there are no restrictions on cartel formation. The organization of petroleum-exporting countries (OPEC) is perhaps the best-known example of an international cartel; OPEC members meet regularly to decide how much oil each member of the cartel will be allowed to produce.

Oligopolistic firms join a cartel to increase their market power, and members work together to determine jointly the level of output that each member will produce and/or the price that each member will charge. By working together, the cartel members are able to behave like a monopolist.

Once established, cartels are difficult to maintain. The problem is that cartel members will be tempted to cheat on their agreement to limit production. By producing more output than it has agreed to produce, a cartel member can increase its share of the cartel's profits. Hence, there is a built-in incentive for each cartel member to cheat. Of course, if all members cheated, the cartel would cease to earn monopoly profits, and there would no longer be any incentive for firms to remain in the cartel. The cheating problem has plagued the OPEC cartel as well as other cartels and perhaps explains why so few cartels exist."
 
Wait OPEC is controlling the price of oil, I thought it was speculators? Can we just pick one bad guy to demonize and stick with it?

Well, although oil has declined 30% in the last few months, I know demand has not declined 30%. Nor has supply increased 30%. I am also sure that the dollar is not 30% stronger. Acombination of things? Sure. But speculation is/was a big part of it.

Now the discussion of OPEC is one of a future meeting and has not been reflected in the recent decline. Are you keeping up?

And, imagine a 30% decline in price without an increase in drilling. I guess the republicans telling us that drilling is the only answer are wrong.
 
Well, although oil has declined 30% in the last few months, I know demand has not declined 30%. Nor has supply increased 30%. I am also sure that the dollar is not 30% stronger. Acombination of things? Sure. But speculation is/was a big part of it.

Now the discussion of OPEC is one of a future meeting and has not been reflected in the recent decline. Are you keeping up?

And, imagine a 30% decline in price without an increase in drilling. I guess the republicans telling us that drilling is the only answer are wrong.

Remember, with that decline someone (many) lost a lot of money because they bought futures at $130+.

This is turning into a political argument and away from an economic one. There was more than one pundit that said oil would come down after the Olympics. Yes, there is OPEC with their influence, there are speculator; and there's also the market, which the speculators plan. If people are buying less oil, the price comes down. Asia is slowing its growth and they are driving less over there as well. Read the WSJ once in a while. Read the whole thing, not just the comics. ;)
 
Hi!

What's the problem with "Drilling"???

First of all, what do U mean by "Drilling"???

If, drilling you mean drilling in a US domestic location that is shallow, easy to access, and easy to get the oil out of, then drilling is a great idea.

The "harder" (technologically, economically, and the longer it will take to develop an oil field, and the harder it will be to move that oil to a refinery) it is to drill, the less sense it makes.

If by "Drilling" you mean in an off-shore location, with a total depth (water and land) of 35,000', with a lead time of 10+ years, and ENORMOUS cost to deliver the oil to market, then it makes NO sense at all.

Why does it not make sense to drill for expensive, long-term (5-10 years+ for the oil to come on line) oil?

Because all those resources: Dollars, personnel, natural resources to make the drilling equipment/oil deliver equipment, etc., would be better used to develop a RENEWABLE energy source.

If we spend $100m and 5 years to get oil production started out of one well, we will pump out the oil and it will end.

If we used the same $100m and 5 years to develop a RENEWABLE energy source, then America (and our Allies) will have energy, basically, FOREVER, with minimal pollution.

If the energy source you are promoting will not deliver energy 100 years from now, it is worthless as a long-term goal.

Drilling cheaply and quickly is a good idea.

Also, NUCLEAR plants are desperately needed to tide us over in the change from Oil to RENEWABLE fuels.

France is kicking our ass in Nuclear energy. Nice!

cliff
YIP
 

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