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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Pete Young who wrote (39975)3/15/1999 11:52:00 AM
From: diana g  Read Replies (1) of 95453
 
Re: Compliance
Hi Pete, you wrote <<<...A more middle ground might assume a moderate and inconsistent level of cheating by members...an occasional yanking of the lion's tail, but this could disinigrate into a "tragedy of the commons" situation rather quickly if the compliant members perceive that cheaters derive benefits with no repercussions. ...>>>

I agree this is a worrisome possibility. Compliant producers seem to have only one weapon --- opening the taps --- and it's easy to imagine that any one producer might figure that extreme measure wouldn't be used for minor transgressions, and the situation could then disintegrate, with one after another adding a bit more here and there.

George Cole pointed out this statement as important:
biz.yahoo.com
<<<...Jassem al-Saadoun, an independent Kuwaiti economist, said the latest agreement would be ''worthless'' without compliance, but noted it had the ''blessing of very strong parties, including the United States.''
"Washington fears low oil prices will produce political and social instability in the Gulf region," al-Saadoun told The Associated Press....>>>

Washington and other political powers could bring pressure to bear on non-compliant producers in ways that other producers could not. And a more stable oil price at a level which would assure that domestic production was maintained at a comfortable level for national security seems a goal we could assume the USA and other powers would have.

BWDIK?

regards,
diana
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