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To: Alastair McIntosh who wrote (3163)6/23/1998 7:26:00 PM
From: Janice Shell  Read Replies (1) | Respond to of 11684
 
The problem with production cuts is that some OPEC countries are so cash poor that they do not adhere to the agreed level of production. Also, non-OPEC producers tend to take advantage of production cuts by OPEC.

And of course the price of oil is pegged to the dollar. In the near and intermediate term, East Asian producers may badly want to add to their dollar reserves. And as you note, once OPEC members start squabbling, as they so often do, their firm intentions generally fall by the wayside.

Oddly, this is a moment in which a case for either higher or lower oil prices could be made with almost equal effect.



To: Alastair McIntosh who wrote (3163)6/23/1998 8:51:00 PM
From: Mongo2116  Respond to of 11684
 
At 12.00 a barrel the OPEC nations are losing billions in potential revenue. Their whole economy depends on oil, except for what they have started with oil money. They do not want to go back to being camel herding bedouins. Yes, oil may still go down because they are not tight with each other and are always watching their back, but most likely it has hit near bottom. FILL UP YOUR GAS TANK NOW! :)


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