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Finally, as a outrage bear i must say that oil has run its course for probably most of it. The fact that after the Opec decision to lower supply the oil is falling another 10% or so per barrel, it shows that the underlying oil price weekness is tremendeous. I would not be surprised to see oil falling as low as $20 per barell but overall the move has been done (from 150 to 40). You guys outthere in the US must be very happy about it as your tankfiller price is not as "enriched" by taxes as ours here in Europe ? Any thoughts about the oil price in general ?

P.S. I must say that one of the nice side effects of the much lower oil price is that "despots" like Chavez and his entourage have become very, very quiet..!
 

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It has been nice to see gas prices reduce at the pump during the last 2 months. Currently unleaded is 86.9 pence per litre in the UK, or £3.945 per gallon. Given the weakness of Sterling against the Euro (1.055 today:wall:), it means that gas in Britain is the equivalent of 4.16 euros a gallon or 0.917 euros a litre. Britain must be the cheapest place in the EU to buy gas now. It's a real shame that the British Government has caused a run on Sterling by it's incompetance in dealing with the financial crisis, and have taken us from being a wealthy first world nation to the edge of a third world nation:cry3:
 

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And why does OPEC feels it needs to lower the daily quote? They say they will lower the production to raise the price of oil, but they forgot to mention why? Is there a reason for oil to be more expencive than this, are they out of money, do they need to invest on some distant planet of the solar system? Why, I don't get why they want more money for the product that isn't theirs in first place. The oil is the product of the nature and as such it belongs to everybody and it is not their private possession. They are so arrogant they dont even explain their actions anymore. They just do what they feel is good for them. But it is the OIL MEN that are behind this crisis, the impossible price of 150$ per barrel brought the world economy to its knees, america will never recover, it will live the faith of the kingdom. The power is shifting now, and its going east... What I care is that my 2 favorite brands: Opel and Corvette are facing dark future.
 

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Fuel prices have dropped dramatically. 91 octane in July was $4.90/gallon. It is now about $1.90/gallon in Northern Calif.

Certainly our prices are a far cry from those in Europe, but your taxes are supporting much of your infrastructure-roads, bridges, health care.

Last Sept in Italy I noticed that 2ndary roads were in better shape than our freeways.

If we taxed more of the gas we'd have superb roads as we did at one time here.

The downside to low gas prices is that folks with the huge SUV's are once again driving them. SUV's here in the US have accounted for 50% of the gasoline consumption here.

High fuel prices are beneficial to people driving less and driving smaller cars. This is where Europe is way ahead of the self consuming America.
 

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And why does OPEC feels it needs to lower the daily quote? They say they will lower the production to raise the price of oil, but they forgot to mention why? Is there a reason for oil to be more expencive than this, are they out of money, do they need to invest on some distant planet of the solar system? Why, I don't get why they want more money for the product that isn't theirs in first place. The oil is the product of the nature and as such it belongs to everybody and it is not their private possession. They are so arrogant they dont even explain their actions anymore. They just do what they feel is good for them. But it is the OIL MEN that are behind this crisis, the impossible price of 150$ per barrel brought the world economy to its knees, america will never recover, it will live the faith of the kingdom. The power is shifting now, and its going east... What I care is that my 2 favorite brands: Opel and Corvette are facing dark future.

As far as I am aware the primary reason for cutting production is oversupply in a declining market, any concerned business would do the same. For example a number of automakers are shutting down production for upto several months to reduce oversupply. It is not arrogance to look after ones self interest (reference Adam Smith 'Wealth of Nations'). There is a need for prices to increase by a certain amount as it allows increasing costs to be met as well as facilitating profits for further investment and returns for investors, both of which are important for the continued development of any business.

Incidentally it is not the oil price alone that has contributed to the current economic crisis, it is a combination of factors. Indeed there is a strong argument that the oil price was artificially inflated by market speculators i.e. the financial system which has its base in Western Capitalist economies and is now collapsing around us (a little melodramatic I know - but you get my meaning)

Why, I don't get why they want more money for the product that isn't theirs in first place. The oil is the product of the nature and as such it belongs to everybody and it is not their private possession.
Does that mean I can walk into DeBeers and pick whichever Diamond I want?

You have to remember that oil was not as valuable a commodity as it is today even 150 years ago. The greater demand for oil was created by industrialisation and the subsequent advent of the automobile industry. As the 20th century evolved so did the uses for oil. I hardly think you can blame the OPEC (or the Norwegians for that matter) for being in the right place at the right time.


Last Sept in Italy I noticed that 2ndary roads were in better shape than our freeways.

If we taxed more of the gas we'd have superb roads as we did at one time here.
I am not sure about the Italians or other EU states but the problem is that most of the revenues generated by Government in the UK through fuel duty, road tax, Insurnance Premium Tax (given you cannot drive a vehicle without insurance), etc is not spent on our transport infrastructure. Drive through central London and see how many potholes you crash through!



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Why, I don't get why they want more money for the product that isn't theirs in first place.
It completely is their product. It comes from their country. If you mine gold in Africa, for example, you pay a royalty for the priviledge. As is absolutely right - the country should profit from having the resource, and the company extracting it should profit from providing the expertise.

What is questionable (well, plain criminal) about OPEC's tactics is that the world is dependent on their oil supply and they have gathered together to ensure that true supply and demand rules go out the window. This is what we call kartel forming, and when Microsoft did something similar they were fined $X Billion by the European Union. De Beers was also trying to do the same (they are not that powerful anymore), but at least that was with a product that nobody needs. What would happen if all the iron ore or copper producing countries did the same? There would be a public outrage. It is strange that the OPEC gets away with what it does.


Onno



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As far as I am aware the primary reason for cutting production is oversupply in a declining market, any concerned business would do the same. For example a number of automakers are shutting down production for upto several months to reduce oversupply. It is not arrogance to look after ones self interest (reference Adam Smith 'Wealth of Nations'). There is a need for prices to increase by a certain amount as it allows increasing costs to be met as well as facilitating profits for further investment and returns for investors, both of which are important for the continued development of any business.

Incidentally it is not the oil price alone that has contributed to the current economic crisis, it is a combination of factors. Indeed there is a strong argument that the oil price was artificially inflated by market speculators i.e. the financial system which has its base in Western Capitalist economies and is now collapsing around us (a little melodramatic I know - but you get my meaning)



Does that mean I can walk into DeBeers and pick whichever Diamond I want?

You have to remember that oil was not as valuable a commodity as it is today even 150 years ago. The greater demand for oil was created by industrialisation and the subsequent advent of the automobile industry. As the 20th century evolved so did the uses for oil. I hardly think you can blame the OPEC (or the Norwegians for that matter) for being in the right place at the right time.




I am not sure about the Italians or other EU states but the problem is that most of the revenues generated by Government in the UK through fuel duty, road tax, Insurnance Premium Tax (given you cannot drive a vehicle without insurance), etc is not spent on our transport infrastructure. Drive through central London and see how many potholes you crash through!



.
Have you been to Quebec lately?One of the highest taxed areas of all NA, and our roads and highways SUCK!!Hats off to the Italians,the French,Austrians...etc...I logged 4600km by car with my wife and two small children in Italy-did both coasts up and down and all I can say about the roads and highways is that they were fabulous.I was paying 1.80 euro per litre of diesel at the time...Here prices have fallen, but nowhere near where they should be .Oil companies are and will always be rich.It's all about GREED,GREED,GREED!And it's finally biting those greedy b------ds in the a--!
I feel sorry for all those whose livleyhoods are in jeapordy whether in the financials or atuomotive sectors.Tough times ahead...
 

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$30-35

I believe oil will stabilize at $30-35 / bbl


OPEC may want to govern it, but after members will stray from the farm to recoup their own losses/needed-income oil will be out there.

I also believe persons are actually performing some sort of lower consumption. I know I am, and I don't really keep track.

Even at these levels, I am trying to send a message [Ferrari's excluded :) ]

the entire oil jump, and I said it from the begin, was a manipulation by the same boys that gave us Enron, sub-prime mgts, and lousy banking/credit industry....GREED/speculation.

People are revolting on those clowns..and GOOD....hope they all lost their shirts.

using common man and especially the less fortunate to take it upon themselves for their greed is low-humanity.

People are making changes, but the one stat I found last week to be a bit confusing was, Toyota/Honda etc. are reporting a slow/off pace of hybrids.

customers seem to be stooopid, well some, in their choices believing oil may be this low for time to come: WRONG....it will bounce back up

ALSO, and this kills me, a CA senator/rep has proposed a bottom price of about $3/gal as a means to force people to conserve: WTF!!

the problem is poor conservation by the makers due to low oversight of regulation to MAKE them toe the mark...thus the auto bailout, the oversight blame-game-side-show, and the poor consummer paying for all of it: BACK DOOR TAX.

they should all be replaced.
 

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Discussion Starter #10
It completely is their product. It comes from their country. If you mine gold in Africa, for example, you pay a royalty for the priviledge. As is absolutely right - the country should profit from having the resource, and the company extracting it should profit from providing the expertise.

What is questionable (well, plain criminal) about OPEC's tactics is that the world is dependent on their oil supply and they have gathered together to ensure that true supply and demand rules go out the window. This is what we call kartel forming, and when Microsoft did something similar they were fined $X Billion by the European Union. De Beers was also trying to do the same (they are not that powerful anymore), but at least that was with a product that nobody needs. What would happen if all the iron ore or copper producing countries did the same? There would be a public outrage. It is strange that the OPEC gets away with what it does.


Onno
Dear Onno

OPEC's does not just gets away...in the longer term OPEC always hurted itself, The west will adapt to their regime, demand falls, oil prices falls even with production cut and then happens what always happens...some members of the OPEC are breaking the members agreement because the still falling price forces them to do so to regain revenue for their most basic needs. This is the economic fact on OPEC after all.
 

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Dear Onno

OPEC's does not just gets away...in the longer term OPEC always hurted itself, The west will adapt to their regime, demand falls, oil prices falls even with production cut and then happens what always happens...some members of the OPEC are breaking the members agreement because the still falling price forces them to do so to regain revenue for their most basic needs. This is the economic fact on OPEC after all.
Quite true, 212, but even so they influence the market in ways they should not be allowed to.


Onno



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