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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: GREENLAW4-7 who wrote (72808)10/5/2006 3:10:26 PM
From: ChanceIs  Read Replies (1) of 206181
 
>>>IS OPEC RELEVENT?<<<

I am not quite sure where you are going there.

I believe that OPEC is irrelevant because they are all maxed out, and probably in decline. The only question for them is do they cut more to drive the price to $100, or be happy with the market around $60. With little or no spare capacity, there is no potential for an increase by any single member to take market share from another. The Texas RRC used to keep a lid on production in the US until about 1970. With the US peaking, it was no longer needed. Stated differently, you will not see OPEC members driving the price down as they have in the past. Ronald Reagan is widely credited for sinking the Soviet Union through economic warfare. One ploy was to get Saudi to over produce so that the inept Russians could not sell on the world market for hard currency at a price greater than their production cost. Things like that won't happen any more. Hugo knows it.

Perhaps you are suggesting that OPEC is no longer a force because of internal infighting. That certainly happened in the past. However they did an exemplary job in late '98 and early '99 of coordination to limit production when crude had dropped to $10. Of course they were hard up against a wall and it was cooperate or else.
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