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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Rolla Coasta who wrote (9112)	9/9/2006 5:51:14 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 217619

OPEC can't control the oil price at all, other than in the short term by cutting and raising production. In the long run, they either sell their oil or leave it in the ground. Leaving it in the ground will not suit any of them. Therefore they will sell it. So, all they do is introduce a bit of lumpiness into oil prices which carries over, less strongly, into other energy markets, such as insulation, walking and catching a bus. Lumpiness is not a good thing for a seller of products because it puts buyers off unreliable suppliers. One doesn't want to have to go shopping around for product, or running out of supplies, because the idiot supplier decides it's time to cut your supply to increase their prices temporarily. You will move to a more reliable product. You won't wait for the idiot to come back saying "I've changed my mind, you can buy my oil now and it's only $30 a barrel". You will say "Look mate, you are a f...ing moron and you can stick your oil right up your arse. I've bought a nuclear reactor to run my car." Sure, it's fun for OPEC leaders to swagger around Zurich or Stockholm or wherever they have their dumb meetings, flying in their private jets, staying in swanky hotels, enjoying the manner to which they have become accustomed, hiring economists to advise them on this that and the other. Woe betide any economist who tells them they are dumb and to cancel the whole dopey OPEC thing. Economists are not stupid; they will tell them OPEC cuts are an excellent idea and trot out some charts and graphs for the assembled idiots to contemplate. Same as agricultural subsidy economists do for the farmers and politicians of Europe and the USA. Big important people need big important meetings in luxury places. Come to think of it, I'm going to one next week. But at least the meeting has a function. The luxury seems a waste of money to me, but the shareholders are spending their own money, so that's up to them. I bet I'm the only one traveling economy class. Hmmmm - maybe I should have booked business class, but it goes against the grain. I certainly wouldn't spend my own money on business class. Well, I might. But ... anyway... back to OPEC> If they cut production to hoist prices again, they'll lose more customers, permanently. The net present value discount rate blah blah blah means they will sell their oil cheaper still at a later date meaning even worse returns than if they took a reasonable price now. Supply and demand control the price, not OPEC. All they do is cause greater amplitude in price movements. With no OPEC, anyone with oil would now be pumping like crazy, digging new holes and selling insulation as fast as they can go. When prices drop to $30, the biodiesel inventors will give the game away. Photovoltaic sales will drop, as will Prius sales. Especially when people learn they have to replace the battery at huge cost. I wonder if the battery and electrics can simply be removed and one could have a gutless little car running on petrol? Mqurice