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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Douglas V. Fant who wrote (24683)6/24/1998 6:14:00 PM
From: marc chatman  Read Replies (2) of 95453
 
Doug, perhaps I should ask how much of the oil production OPEC controlled in '73 and '80. I don't know, but I suspect it was higher than today. If OPEC successfully cuts their production to raise prices, wouldn't the price rise entice non-OPEC producers to pump and sell that extra barrel or two at the higher price (bringing the supply back up and the price back down)? And if OPEC members see this occurring, aren't they then likely to throw up their hands and pump more themselves?

Are the non-OPEC producers able to increase production immediately if prices should rise a buck or two?

Also, I would expect the oil traders to put pressure on the OPEC producers with continued short selling. How long can some of the questionable players hold out if oil heads to $10 or below? Did those countries have similar financial troubles in '73 and '80?

I think it comes down to micro-motives. As soon as the meeting disbands, I expect each nation to do what it feels it needs to do.
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