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Politics : Formerly About Advanced Micro Devices
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To: Amy J who wrote (189642)6/4/2004 4:00:18 PM
From: tejek  Read Replies (1) of 1576324
 
RE: "BEIRUT The Organization of Petroleum Exporting Countries agreed Thursday to raise its oil production quota by two million barrels "

This increase is because they are afraid alternative sources of energy will be increasingly supported by the govt and used by consumers, thus reducing their profits.

So, to maintain their long-term profits, they reduce the price of oil in the short-term in order to reduce the risk of alternative energy sources replacing some long-term oil consumption.

Except the whole thing is a joke.......last fall, OPEC decided that there was enough oil and therefore, was dropping production by 2 million barrels. However, because OPEC is a rather weak cartel with less than committed members, most oil experts believe many members did not reduce production and that the reduction was only on paper. As a result production is still at the higher level; that higher level is the same level to which OPEC said yesterday they would increase production. In other words, there will be no change in production.

Having said that, I think there is enough oil on the markets. The reason gas prices are so high in the US is because refiners can't keep up with demand and the higher price of crude. The reason crude prices are so high is because of the political instability in three major oil producers: Iraq, Venezuela and Nigeria.

In other words, the whole thing is one big mess that is doing wonders for my portfolio.........I own a lot of nat. gas stocks. <g>

ted
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