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OPEC Does…Whatever It Wants! |
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This is why it's good to be a cartel (from the BBC):
The head of Opec, the cartel of oil-producing nations, has said it is unlikely to increase production at this week's meeting.
It had been hoped members would boost the supply of oil to help prices fall from their historically-high levels.
The price of a barrel of oil reached another record of almost $104 during trading on Monday in New York.
OPEC says it will not increase output because the current demand isn't actually there. Nor would it want prices to stay elevated too long, because that would eventually hurt sales and possibly send the American economy (and any other that relies on the dollar) into recession.
From the NY Times:
Analysts attribute much of the recent run-up in oil prices to speculative investors driven to the market by the falling dollar. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling. This view of oil futures as a safe haven for money during turbulent times has in many cases rendered reports on inventories and demand moot.
But at least for a little while, OPEC will make bank on the spike in oil prices, sending Americans a powerful reminder that we are still beholden to foreign countries for our energy. I say let the smiling face of OPEC President Chakib Khelil today in Vienna be the newest advertisement for creating and investing in an alternative, renewable, and totally homegrown energy supply.
OPEC OPEC nothing but trouble question their policies and you'll be turned into rubble. OPEC OPEC nothing but trouble…..