OPEC and the pricing of oil
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OPEC is a cartel and has always been very political. And use of oil as a weapon has been used previously.
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Richard A. Abbott wrote:
And use of oil as a weapon has been used previously.
Boiling it and tipping it over castle walls onto people's heads, for example...
Not by OPEC members I suspect. ;)
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So, looks like there's some agitation amongst the OPEC members about trading oil in a basket of currencies rather than the U.S. dollar. BBC article[^]. CNN article[^]. I think this would be terrible for the U.S., but economically it's a much better idea than favouring a certain currency over others. Unfortunately for the U.S. this announcement couldn't come at a worse time - i.e. during a rough period in the U.S. economy. However, this development shouldn't surprise anyone. It was bound to happen that OPEC became a political organization. The Saudi's are saying that OPEC will remain a tool for development, but how long that will last is another question. I'm afraid the days of "low-priced" oil are rapidly coming to an end. It's all the more important for the world, and particularly the West, to wean itself off of oil and develop alternative fuel sources and better ecological behaviour.
"I know what you know and you don't know what I know."
Wow, really looks like we're fucked this time! :laugh:
The only conspiracies that concern me are the ones I am completely unaware of. By the time I find out about it, its probably a done deal. Nothing in the entire universe is more useless than morality without authority. A morality free of hypocrisy is no morality at all.
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So, looks like there's some agitation amongst the OPEC members about trading oil in a basket of currencies rather than the U.S. dollar. BBC article[^]. CNN article[^]. I think this would be terrible for the U.S., but economically it's a much better idea than favouring a certain currency over others. Unfortunately for the U.S. this announcement couldn't come at a worse time - i.e. during a rough period in the U.S. economy. However, this development shouldn't surprise anyone. It was bound to happen that OPEC became a political organization. The Saudi's are saying that OPEC will remain a tool for development, but how long that will last is another question. I'm afraid the days of "low-priced" oil are rapidly coming to an end. It's all the more important for the world, and particularly the West, to wean itself off of oil and develop alternative fuel sources and better ecological behaviour.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
It's all the more important for the world, and particularly the West
I thought it would be all the more so for India and China, both guzzling gas like never before. I think Americans have it easier - in a straight dollar to rupee conversion, the price Americans pay for petrol is lower than we do here. It makes a lot more sense for OPEC, of course, to trade in a basket of currencies than to paint themselves into a corner with a single one that is looking increasingly unattractive.
Cheers, विक्रम
And sleep will come, it comes to us all And some will fade and some will fall
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73Zeppelin wrote:
It's all the more important for the world, and particularly the West
I thought it would be all the more so for India and China, both guzzling gas like never before. I think Americans have it easier - in a straight dollar to rupee conversion, the price Americans pay for petrol is lower than we do here. It makes a lot more sense for OPEC, of course, to trade in a basket of currencies than to paint themselves into a corner with a single one that is looking increasingly unattractive.
Cheers, विक्रम
And sleep will come, it comes to us all And some will fade and some will fall
Vikram A Punathambekar wrote:
I think Americans have it easier - in a straight dollar to rupee conversion, the price Americans pay for petrol is lower than we do here.
Yes, they do. Until now they pay very low prices for gas. If OPEC changes the currency, that will stop.
Vikram A Punathambekar wrote:
It makes a lot more sense for OPEC, of course, to trade in a basket of currencies than to paint themselves into a corner with a single one that is looking increasingly unattractive.
Yes, indeed it makes more sense for them. It is also more fair for all the countries in the world when it is priced in terms of a basket. That way one region of the world and another pay a more equivalent price for gas.
"I know what you know and you don't know what I know."
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Wow, really looks like we're fucked this time! :laugh:
The only conspiracies that concern me are the ones I am completely unaware of. By the time I find out about it, its probably a done deal. Nothing in the entire universe is more useless than morality without authority. A morality free of hypocrisy is no morality at all.
You laugh now, but you've been enjoying dirt-cheap gas for a long time. Furthermore, if China decides to liquidate their foreign reserves on top of oil being priced with a basket of currencies, you'd better watch out. I tell you that you won't be laughing then.
"I know what you know and you don't know what I know."
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You laugh now, but you've been enjoying dirt-cheap gas for a long time. Furthermore, if China decides to liquidate their foreign reserves on top of oil being priced with a basket of currencies, you'd better watch out. I tell you that you won't be laughing then.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
I tell you that you won't be laughing then.
Yes, I will. The spectacle of an international economy balanced atop the Euro will be funny even from a soup line. The wealth of the world will always flow to where ever it has the greatest opportunity for growth. That is never going to be Europe. The best thing that could happen to the US right now would be a complete melt down of the international economy which would proably happen given the chaos that would ensue from Europe trying to manage the planet's economic affairs. As hard as things might become, the US is better positioned than any other society to deal with the consequencies of such a situation. Turn off this economy for a year or two and most of the world's problems would get solved in the ways nature intended.
The only conspiracies that concern me are the ones I am completely unaware of. By the time I find out about it, its probably a done deal. Nothing in the entire universe is more useless than morality without authority. A morality free of hypocrisy is no morality at all.
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Vikram A Punathambekar wrote:
I think Americans have it easier - in a straight dollar to rupee conversion, the price Americans pay for petrol is lower than we do here.
Yes, they do. Until now they pay very low prices for gas. If OPEC changes the currency, that will stop.
Vikram A Punathambekar wrote:
It makes a lot more sense for OPEC, of course, to trade in a basket of currencies than to paint themselves into a corner with a single one that is looking increasingly unattractive.
Yes, indeed it makes more sense for them. It is also more fair for all the countries in the world when it is priced in terms of a basket. That way one region of the world and another pay a more equivalent price for gas.
"I know what you know and you don't know what I know."
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73Zeppelin wrote:
Yes, they do. Until now they pay very low prices for gas.
Are you adjusting that for taxes? At least in Europe, most of the difference is in how gas is taxed.
Compassionate Conservatism is an Oxymoron. Bush is just a Moron.
Tim Craig wrote:
Are you adjusting that for taxes? At least in Europe, most of the difference is in how gas is taxed.
Yes, the taxes in Europe are high (for gas), but even with a tax correction, North America still enjoys some of the lowest gas prices in the West. It's bloody expensive in Europe to own a car.
"I know what you know and you don't know what I know."
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So, looks like there's some agitation amongst the OPEC members about trading oil in a basket of currencies rather than the U.S. dollar. BBC article[^]. CNN article[^]. I think this would be terrible for the U.S., but economically it's a much better idea than favouring a certain currency over others. Unfortunately for the U.S. this announcement couldn't come at a worse time - i.e. during a rough period in the U.S. economy. However, this development shouldn't surprise anyone. It was bound to happen that OPEC became a political organization. The Saudi's are saying that OPEC will remain a tool for development, but how long that will last is another question. I'm afraid the days of "low-priced" oil are rapidly coming to an end. It's all the more important for the world, and particularly the West, to wean itself off of oil and develop alternative fuel sources and better ecological behaviour.
"I know what you know and you don't know what I know."
When the rest of the world refuses to trade with the US (and accept $$$ in payment), then we're all in for a rude awakening, my friends. That's when the economies of ALL countries will suffer, not just the US. Can any nation afford not to trade with the largest consumer population (at least for the time being, until the Chinese and Indian middle classes eveolve). I think not. But then, that's just my humble opinion.
John P.
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Vikram A Punathambekar wrote:
I think Americans have it easier - in a straight dollar to rupee conversion, the price Americans pay for petrol is lower than we do here.
Yes, they do. Until now they pay very low prices for gas. If OPEC changes the currency, that will stop.
Vikram A Punathambekar wrote:
It makes a lot more sense for OPEC, of course, to trade in a basket of currencies than to paint themselves into a corner with a single one that is looking increasingly unattractive.
Yes, indeed it makes more sense for them. It is also more fair for all the countries in the world when it is priced in terms of a basket. That way one region of the world and another pay a more equivalent price for gas.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
If OPEC changes the currency, that will stop.
Sorry if this sounds naive, but how? There will be, of course, the overhead in currency conversion, but I don't see how that can have a major impact. That might just also mean that Iran's number is up. :doh:
Cheers, विक्रम
And sleep will come, it comes to us all And some will fade and some will fall
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You laugh now, but you've been enjoying dirt-cheap gas for a long time. Furthermore, if China decides to liquidate their foreign reserves on top of oil being priced with a basket of currencies, you'd better watch out. I tell you that you won't be laughing then.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
Furthermore, if China decides to liquidate their foreign reserves
Saudi Arabia doing that is more potent and more likely, I think. That will be the end of the dollar as we know it.
Cheers, विक्रम
And sleep will come, it comes to us all And some will fade and some will fall
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digital man wrote:
Just another reason that Bush will use to nuke Iran: he'll feel that it is his duty since he won't trust whoever follows (Clinton?) to follow through and not allow Iran to develop it's own nuclear capability. If Iran is allowed to do that they will, without doubt, use them. Attempting to get OPEC to stop using dollars as the base currency is a way of attempting to isolate the US and render any sanctions worthless.
Yes, exactly. It's OPEC being used as a political tool. I wonder how long it will be until the Saudi's stab their American ally in the back and side with Iran and Chavez? The worst thing the West ever did was to make itself dependent on Middle East oil. In any event, the U.S. needs a better president than Bush - they need one with a longer-term view.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
It's OPEC being used as a political tool.
With such a nickname I thought you would remember 1973?
73Zeppelin wrote:
they need one with a longer-term view
and who doesn't rely on expeditionary forces only.
Anyone who is not a misanthropist at 40 never loved men at any time Fold with us! ¤ flickr
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So, looks like there's some agitation amongst the OPEC members about trading oil in a basket of currencies rather than the U.S. dollar. BBC article[^]. CNN article[^]. I think this would be terrible for the U.S., but economically it's a much better idea than favouring a certain currency over others. Unfortunately for the U.S. this announcement couldn't come at a worse time - i.e. during a rough period in the U.S. economy. However, this development shouldn't surprise anyone. It was bound to happen that OPEC became a political organization. The Saudi's are saying that OPEC will remain a tool for development, but how long that will last is another question. I'm afraid the days of "low-priced" oil are rapidly coming to an end. It's all the more important for the world, and particularly the West, to wean itself off of oil and develop alternative fuel sources and better ecological behaviour.
"I know what you know and you don't know what I know."
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73Zeppelin wrote:
It's OPEC being used as a political tool.
With such a nickname I thought you would remember 1973?
73Zeppelin wrote:
they need one with a longer-term view
and who doesn't rely on expeditionary forces only.
Anyone who is not a misanthropist at 40 never loved men at any time Fold with us! ¤ flickr
K(arl) wrote:
With such a nickname I thought you would remember 1973?
Of course - but that was an exceptional circumstance.
K(arl) wrote:
and who doesn't rely on expeditionary forces only.
Yes, Sarkozy should send some people into the street! ;)
"I know what you know and you don't know what I know."
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The last country who asked to have its oil paid in € was Iraq. Go figure.
There are two things that one must get used to or one will find life unendurable: the damages of time and injustices of men Fold with us! ¤ flickr
K(arl) wrote:
The last country who asked to have its oil paid in € was Iraq. Go figure.
Did that have to do with the Oil for Food program? I think oil should be priced in a weighted combination of currencies. It is more fair that way and would prevent devaluation or over-valuation of oil as the result of currency/exchange rate fluctuation. No single currency should hold such a position, it's too unstable.
"I know what you know and you don't know what I know."
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K(arl) wrote:
The last country who asked to have its oil paid in € was Iraq. Go figure.
Did that have to do with the Oil for Food program? I think oil should be priced in a weighted combination of currencies. It is more fair that way and would prevent devaluation or over-valuation of oil as the result of currency/exchange rate fluctuation. No single currency should hold such a position, it's too unstable.
"I know what you know and you don't know what I know."
73Zeppelin wrote:
Did that have to do with the Oil for Food program?
I was rather refering to the theory that it was also a motivation for the US to invade.
73Zeppelin wrote:
No single currency should hold such a position
Then why is the US pushing through Saudi Arabia to keep USD as the 'oil currency'? There's a a reason for such a move, right?
Change of fashion is the tax levied by the industry of the poor on the vanity of the rich Fold with us! ¤ flickr
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K(arl) wrote:
With such a nickname I thought you would remember 1973?
Of course - but that was an exceptional circumstance.
K(arl) wrote:
and who doesn't rely on expeditionary forces only.
Yes, Sarkozy should send some people into the street! ;)
"I know what you know and you don't know what I know."
73Zeppelin wrote:
but that was an exceptional circumstance.
73Zeppelin wrote:
Sarkozy should send some people into the street!
I really don't worry about this :rolleyes:
There are two things that one must get used to or one will find life unendurable: the damages of time and injustices of men Fold with us! ¤ flickr
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73Zeppelin wrote:
but that was an exceptional circumstance.
73Zeppelin wrote:
Sarkozy should send some people into the street!
I really don't worry about this :rolleyes:
There are two things that one must get used to or one will find life unendurable: the damages of time and injustices of men Fold with us! ¤ flickr
The 1979 crisis wasn't due to OPEC. OPEC tried to up production to offset the problem of Iran. And technically, the 1973 crisis wasn't OPEC, but it's predecessor.
"I know what you know and you don't know what I know."
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73Zeppelin wrote:
Did that have to do with the Oil for Food program?
I was rather refering to the theory that it was also a motivation for the US to invade.
73Zeppelin wrote:
No single currency should hold such a position
Then why is the US pushing through Saudi Arabia to keep USD as the 'oil currency'? There's a a reason for such a move, right?
Change of fashion is the tax levied by the industry of the poor on the vanity of the rich Fold with us! ¤ flickr
K(arl) wrote:
I was rather refering to the theory that it was also a motivation for the US to invade.
I'd believe that if I saw oil flowing from Iraq to the U.S., but I don't see that. There is less oil production in Iraq now than before the invasion. I don't think the U.S. invaded to secure oil supplies or they would have the most protection around the oil fields and that's not the case.
K(arl) wrote:
Then why is the US pushing through Saudi Arabia to keep USD as the 'oil currency'? There's a a reason for such a move, right?
Of course, the U.S. doesn't want its dollar to slide any further. It would be bad not only for the U.S. but also for countries like China and the OPEC countries who hold huge reserves of U.S. currencies. My argument is that pricing oil in a single currency is unfair to begin with and oil should eventually be priced in terms of more than one currency.
"I know what you know and you don't know what I know."