OPEC decides to curb overproduction

[DogPoundPup]

Source: International Herald Tribune

VIENNA, Austria: OPEC oil ministers have decided to curb overproduction by more than 500,000 barrels.

The move is a compromise meant to avoid new turmoil in oil markets while at the same time reflecting OPEC's attempts to prevent prices from falling too far. Since July, when crude prices spiked to nearly US$150 a barrel, they have lost nearly 30 percent in value.

An OPEC statement issued after oil ministers ended their meeting early Wednesday said the organization has agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries had agreed to cut back 530,000 barrels a day in overproduction.

**NOTE: Entire article content posted as seen here.

Read more: http://www.iht.com/articles/ap/2008/09/10/business/EU-OPEC-Meeting.php

[MichiganVote]

1. Sounds like the Arabs don't want McSame either.

[DJ13]

2. Since July, when crude prices spiked to nearly US$150 a barrel

..........they have lost nearly 30 percent in value.



What a bunch of greedy mutherf*ckers.

If they would go back 7 months the price now is STILL 30% above that level.

[roamer65]

3. I was hoping for a 1 million barrel per day cut.

Oil prices need to stay high to encourage the switchover to alternative sources.

[True_Blue]

4. Opec reduces oil supply

Source: The National, United Arab Emirates

VIENNA // Opec unexpectedly announced a reduction in oil supply at a meeting in Vienna today, pledging to stick rigidly to formal output targets well below its actual production levels.

Chakib Khelil, the Opec president, estimated the move would remove 520,000 barrels of oil from the market, equivalent to 1.7 per cent of the group's current output.

Analysts had expected the Organisation of the Petroleum Exporting Countries, which controls almost half of world oil supply, to keep its output targets unchanged and gloss over excess supplies added earlier this summer when prices hit a record $147 a barrel.

Oil prices immediately jumped 54 cents to $103.80 a barrel on the unexpected candour with which Opec reduced supply at a time when the oil price is still above $100 a barrel. The group said that a 30 per cent fall in prices over the last two months was driven partly by oversupply in the world market.

Read more: http://www.thenational.ae/article/20080910/BUSINESS/789175578/-1/ART

[Demeter]

5. Surprise, Surprise!

Got to keep the speculators in profits....

[WriteDown]

18. Unless your taking the short position!

ouch.

[Hannah Bell]

6. OPEC agrees to surprise output cut, oil price rises

Source: Reuters

OPEC agrees to surprise output cut, oil price rises
Wed 10 Sep 2008, 2:28 GMT

VIENNA, Sept 10 (Reuters) - After hours of wrangling, OPEC on Wednesday agreed to revise its complex output targets and said the move would effectively cut supplies by half a million barrels per day (bpd).

Ministers of the Organization of the Petroleum Exporting Countries (OPEC) had been widely expected to stick to existing production allocations, which have been in place all year.

But they had voiced concern about a growing surplus of oil on the market and prices on Tuesday sank to a five-month low below $102 a barrel, around 30 percent below a record hit in July above $147. The market rallied by a dollar after OPEC's announcement.

Khelil's estimation of how much output will be removed from the market was based on amounts OPEC members were really producing, rather than agreed levels....Leading exporter Saudi Arabia, which has been responsible for up to 750,000 bpd of production above official targets, said the market was balanced.



Read more: http://africa.reuters.com/wire/news/usnLA555829.html

[Hannah Bell]

7. So basically, the production cut = < SA production above their previous target.

OPEC to Pare Back Production By Enforcing Its Own Quotas

Washington Post Staff Writer
Wednesday, September 10, 2008; Page D08

Faced with slumping energy demand from weakening industrialized economies, OPEC oil ministers said last night that petroleum markets are "oversupplied" and vowed to stick to self-imposed quotas that could carve 520,000 barrels a day out of world production...

"Since the market is oversupplied, the conference agreed to abide by September 2007 production allocation," the Organization of the Petroleum Exporting Countries communique said after ministers adjourned early Wednesday morning in Vienna. It said that those were "levels with which members committed to strictly comply.''

The OPEC communique amounts to a call on Saudi Arabia, the cartel's biggest producer, to curb output and reverse an increase it unilaterally announced at a June 21 meeting of oil producers and consumers. The kingdom is now producing close to 9.7 million barrels a day, about 750,000 barrels a day more than its official target.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/09/AR2008090903124.html?hpid=topnews

[Theres-a]

8. Surprise!

:party:

[Indi Guy]

9. Oh Really?!

[2Design]

10. as you can see we don't need to drill more - it is all about profit

and bFEE has given them record profits - gas has tripled since the BFEE took office this time

[depakid]

11. It's about the fall of cartels

[pampango]

13. OPEC cartel's problem: setting production allocations vs enforcing them.

"...OPEC on Wednesday agreed to revise its complex output targets..." "Leading exporter Saudi Arabia ... has been responsible for up to 750,000 bpd of production above official targets".

OPEC has always had trouble keeping countries from exporting more than their "targets". I wonder if that 750,000 bpd was what Bush was able to wrangle out of the Saudis. Who knows? The Saudis have always been more sensitive than many OPEC members to the long term "problem" (from their perspective) of pricing their product so high that alternatives take some of the market in the long run.

Countries whose oil is running out soon (Mexico, Russia, and others) like getting as much as they can for their remaining oil, while exporters like SA want their larger reserves to be valuable long term.

[Nambe]

12. And here comes Ike! Platforms and refineries beware.

Ike´s path to Texas will spike prices as well.

[Indi Guy]

14. sd

...edit for self stupidity.

[Ian David]

15. McCain today announced a plan to reduce the price of a barrel of oil by 50%.

He's going to propose that we make barrels that are 60% smaller.

[ryanmuegge]

16. You can bet your ass the prices at the pump won't increase before the election.

[pampango]

17. Though our gas price just jumped 30 cents yesterday, I think prices will decline

until winter when they usually hit bottom before heading up in the spring.

[yurbud]

19. thanks, Bushies! If I was OPEC, I wouldn't help a US president get in who will attack at least two

members, Venezuela and Iran.