Gasoline - Stray thoughts

[Libsmasher]

So how free does a market need to be to be free? Do none in the cartel compete with each other?

No - they periodically meet and set the price - they are a cartel.

If we can buy all the oil we need from the countries that are not a part of the cartel then we could marginalize them and hurt their market share enough to force them to be less in colusion with each other.

That's right, but we can't - they have too large a share of the available oil.

 

[Pidgey]

Actually, OPEC has tried to maintain a policy of keeping the price of oil lower because they DON'T want it to become economic to explore for oil elsewhere and ramp up non-OPEC production.

Pidgey

 

[Libsmasher]

Actually, OPEC has tried to maintain a policy of keeping the price of oil lower because they DON'T want it to become economic to explore for oil elsewhere and ramp up non-OPEC production.

Pidgey

Actually that's NEAR to what I said - they keep it ABOVE what the free market price would be - otherwise their would be no point to their organization, but not TOO high. But the spot price today is $138/barrel.

 

[Here We Go]

Actually that's NEAR to what I said - they keep it ABOVE what the free market price would be - otherwise their would be no point to their organization, but not TOO high. But the spot price today is $138/barrel.

Now going to $140 barrel, so it's best to keep your tank filled daily to save money.

 

[Libsmasher]

Now going to $140 barrel, so it's best to keep your tank filled daily to save money.

Thar's what the gf says to me - "Let's stop here and get gas -it'll just be more tomorrow."

 

[Andy]

I agree with a lot of that, but the "free market" claim is just false. No economist in the world would agree that a market run at least 1/3 by a cartel is a free market, and I wonder about your numbers.

Free market has nothing to do with whether or not a specific group has more or less "free market influence". The free market has to do with mutual consent of the buyer and the seller. Do we have the freedom to buy from them or not to? Yes we do. No one is holding a gun the USA's head forcing us to buy anything from OPEC. The fact you want to put quotas on imported oil alone, suggests we are free to buy or not to. Of course OPEC is freely choosing to sell.

Again, the market is only run by OPEC to the extent we allow it to. If we choose to build more wells, and sell more Crude Oil, we will have more influence on the market. The same is true for any other country. If all the countries of the world double their oil production, OPEC will be a small dust storm in the middle east somewhere.

With all that said, I think you greatly over estimate the power of OPEC. OPEC is not a cartel. OPEC has no power to enforce it's assumed objectives over any of it's members. In fact, OPEC's control of the market has been marginal for ages. Check out this article on the history of OPEC's control over the market.

OPEC has seldom been effective at controlling prices. While often referred to as a cartel, OPEC does not satisfy the definition. One of the primary requirements is a mechanism to enforce member quotas. The only enforcement mechanism that has ever existed in OPEC was Saudi spare capacity.

From 1982 to 1985, OPEC attempted to set production quotas low enough to stabilize prices. These attempts met with repeated failure as various members of OPEC produced beyond their quotas. During most of this period Saudi Arabia acted as the swing producer cutting its production in an attempt to stem the free fall in prices. In August of 1985, the Saudis tired of this role. They linked their oil price to the spot market for crude and by early 1986 increased production from 2 MMBPD to 5 MMBPD. Crude oil prices plummeted below $10 per barrel by mid-1986. Despite the fall in prices Saudi revenue remained about the same with higher volumes compensating for lower prices.

Case and point? Just think about it.. what was the first Gulf war started over? Iraq wanted to raise oil prices and asked Kuwait to cut production, they refused. Also, remember the late 90s when OPEC cut production repeatedly, yet prices dropped to $10 a barrel? Why? Not only because of Asian markets dropping, but they could not get their own members to follow the production quotas.

Most of OPEC is already at producing at their maximum as is. The three notable exceptions being of course Saudi Arabia, who have increased production several times, Venezuela (and their Ecuador counter-part) who have killed their oil industry with Socialism, and of course Iraq, which we still are rebuilding. But all in all, they really don't have a whole lot of spare capacity.

Saudi arabia has 2/3 of the world's proven reserves, and alone accounts for 1/3 of the sales. If saudi arabia stopped even half of its sales tomorrow, the price of oil would skyrocket. If it pumped everything it could and sold it, the price would drop like a brick. A free market when just one country can do that to a market, or tweak for any price in between - and DOES? Not hardly.

But see... any country can do this. If Canada drilled and pumped full output from all the known sources of oil in it's land, the market would drop and raise on their whim. If WE drilled and pumped from all known oil sources in our boarders, the market would raise and fall on our whim.

Honestly, if people really hate the middle east oil suppliers that much, this would be the best way to hurt them badly. Just start pumping oil insanely, and watch them squeal.

Um.. no... according to the DOE, Saudi doesn't have 2/3 the world proven oil reserves. They have about a 20.4% or a fifth. Canada has about 13.8%. If you don't like infoseek, you can get the official DOE info, but it's a bit tedious.

I disagree that a gradually decreasing quota of imported oil would make prices "skyrocket" and you offer no evidence.

Ok... in this pict, a change in out put of just 2.5 million barrels of oil, is enough to cause a 50% swing in oil cost. Now since, according to the EIA we consume 20.8 Million barrels of oil, and since we import 13 Million of them... a mild 10% drop in imports would be about 1.3 Million loss of oil supply in America. What effect do you think that will have on price as it relates to supply and demand?

Further, currently even if supply and reserves are low, we can purchase from any international supplier. As in, even if OPEC cuts production, we can buy from say, Russia or Canada or Mexico. But if we put a forced cut into imports, and we do not increase domestic production.... can you say oil shortage? Black market?

In a domestic market of certainty about known decreasing availability of oil, particularly if the foreign decreases were initially offset by american resources currently off limits because of dated ecofascist prohibitions, companies would take the risks to get serious about alternate technologies, in fact they won't do it otherwise. There's no way it can be completely painlessly, just like other national emergencies couldn't be painless, but it has to be done, and once it is done, that's the end of the opec looting, the political blackmail of the whole world by middle east theocracies and many other problems.

I'm not sure what alternative technologies you would be referring to. Further, many many oil companies already have invested billions in alternative energy sources... the problem is, none of them are a fraction as good as oil. I think it's a mistake to make particularly damaging policy in the possibly vain hope that some magic energy source will spawn into being.

The free market can't make energy exist, if it doesn't. Making a military tank that can go under water, travel at 50 MPH and hit a moving target while it is moving itself, is where the free market shines. Send out the call, and companies all over will jump at the challenge.

But replacing an energy source is a whole different ball game. You can't just invent energy. It's has to be found and harnessed. Scientifically Oil is a very hard act to follow, and so far it hasn't. You simply can't find a raw energy source as viable, durable, transportable, and as adaptable as oil.

Again, I don't think it has to be done. Why not just get our own oil, and then kiss OPEC goodbye forever? I don't even understand your idea at face value. Why do we want to get rid of OPEC? Because they are charging too much for oil? Well if we force reduction of imported oil by quota, that will raise the price by itself, by your own admission. What's the point? We don't want them to raise prices, so we will beat them to it?

Like I said before, a forced artificial increase in energy cost domestically, will only give our international competition a huge advantage over domestic companies. There will be a huge sucking sound of companies moving over seas.

See if the goal of your plan is to increase oil prices to spur alternative energy research... well isn't that what's already happening? The price of oil is going up so funding of alternative fuel research is increasing? Why not just leave it the way that it is! The difference between your plan and the current situation is, our domestic companies and our international competitors are paying the same for oil, thus we are not losing jobs over this (though we are for other reasons, but adding a new one isn't a good plan).

 

[Libsmasher]

First - thanks for an intelligent post. Most of the time around here, its stuff like "Did ya here about McCain's gaff today?"

Quote:
Originally Posted by Libsmasher
I agree with a lot of that, but the "free market" claim is just false. No economist in the world would agree that a market run at least 1/3 by a cartel is a free market, and I wonder about your numbers.

Free market has nothing to do with whether or not a specific group has more or less "free market influence". The free market has to do with mutual consent of the buyer and the seller. Do we have the freedom to buy from them or not to? Yes we do. No one is holding a gun the USA's head forcing us to buy anything from OPEC. The fact you want to put quotas on imported oil alone, suggests we are free to buy or not to. Of course OPEC is freely choosing to sell.

No - a free market ends when suppliers create combinations to control trade - if OPEC isn't that, it isn't anything.

Again, the market is only run by OPEC to the extent we allow it to. If we choose to build more wells, and sell more Crude Oil, we will have more influence on the market. The same is true for any other country. If all the countries of the world double their oil production, OPEC will be a small dust storm in the middle east somewhere.

I don't think so - again - opec has 2/3 of the world's proven reserves.

With all that said, I think you greatly over estimate the power of OPEC. OPEC is not a cartel. OPEC has no power to enforce it's assumed objectives over any of it's members. In fact, OPEC's control of the market has been marginal for ages. Check out this article on the history of OPEC's control over the market.

No, what's true is sometimes some them have broken ranks, but most of the time they haven't.

Quote:
OPEC has seldom been effective at controlling prices. While often referred to as a cartel, OPEC does not satisfy the definition. One of the primary requirements is a mechanism to enforce member quotas. The only enforcement mechanism that has ever existed in OPEC was Saudi spare capacity.

And that's a BIG mechanism. At least once in the past, I don't remember exactly when, OPEC punished a renegade member who exceeded it's OPEC quota because it wanted more revenue. SA flooded the market with oil, and the renegade country's revenue didn't increase.

From 1982 to 1985, OPEC attempted to set production quotas low enough to stabilize prices. These attempts met with repeated failure as various members of OPEC produced beyond their quotas. During most of this period Saudi Arabia acted as the swing producer cutting its production in an attempt to stem the free fall in prices. In August of 1985, the Saudis tired of this role. They linked their oil price to the spot market for crude and by early 1986 increased production from 2 MMBPD to 5 MMBPD. Crude oil prices plummeted below $10 per barrel by mid-1986. Despite the fall in prices Saudi revenue remained about the same with higher volumes compensating for lower prices.

All that shows is that when OPEC doesn't act like a cartel, it effectively isn't a cartel and doesn't have a cartel's powers, for the time being.

Case and point? Just think about it.. what was the first Gulf war started over? Iraq wanted to raise oil prices and asked Kuwait to cut production, they refused. Also, remember the late 90s when OPEC cut production repeatedly, yet prices dropped to $10 a barrel? Why? Not only because of Asian markets dropping, but they could not get their own members to follow the production quotas.

See above. I think they are all working together now.

Most of OPEC is already at producing at their maximum as is. The three notable exceptions being of course Saudi Arabia, who have increased production several times, Venezuela (and their Ecuador counter-part) who have killed their oil industry with Socialism, and of course Iraq, which we still are rebuilding. But all in all, they really don't have a whole lot of spare capacity.

Where does that come from? They have untold wealth - I don't see why they couldn't increase production.

Quote:
Saudi arabia has 2/3 of the world's proven reserves, and alone accounts for 1/3 of the sales. If saudi arabia stopped even half of its sales tomorrow, the price of oil would skyrocket. If it pumped everything it could and sold it, the price would drop like a brick. A free market when just one country can do that to a market, or tweak for any price in between - and DOES? Not hardly.

But see... any country can do this. If Canada drilled and pumped full output from all the known sources of oil in it's land, the market would drop and raise on their whim. If WE drilled and pumped from all known oil sources in our boarders, the market would raise and fall on our whim.

Do you mean the domestic market?

Honestly, if people really hate the middle east oil suppliers that much, this would be the best way to hurt them badly. Just start pumping oil insanely, and watch them squeal.

I don't think it would effect world prices very much.

Um.. no... according to the DOE, Saudi doesn't have 2/3 the world proven oil reserves. They have about a 20.4% or a fifth. Canada has about 13.8%. If you don't like infoseek, you can get the official DOE info, but it's a bit tedious.

My error - OPEC has 77% of the proven reserves - my point stands when OPEC works together - as they are now.

http://www.opec.org/home/PowerPoint/Reserves/OPEC share.htm

Quote:
I disagree that a gradually decreasing quota of imported oil would make prices "skyrocket" and you offer no evidence.

Ok... in this pict, a change in out put of just 2.5 million barrels of oil, is enough to cause a 50% swing in oil cost. Now since, according to the EIA we consume 20.8 Million barrels of oil, and since we import 13 Million of them... a mild 10% drop in imports would be about 1.3 Million loss of oil supply in America. What effect do you think that will have on price as it relates to supply and demand?

Apparently, we have different definitions of "skyrocket" - and I call for a more slowly decreasing import quota - a few percent the first year, rising to 5% a year, maybe. You worry about a 50% increase - here's what to really worry about: Obama gets elected and does the iraq cut and run, iraq is gulped up by iran one week later, the now much bigger iran looming over kuwait and saudi arabia finlandize those countries, and cut off ALL OIL to the US? THEN WHAT??

Further, currently even if supply and reserves are low, we can purchase from any international supplier. As in, even if OPEC cuts production, we can buy from say, Russia or Canada or Mexico. But if we put a forced cut into imports, and we do not increase domestic production.... can you say oil shortage? Black market?

And what looting will THEY do? What hiked up price? What poltical blackmail??

Quote:
In a domestic market of certainty about known decreasing availability of oil, particularly if the foreign decreases were initially offset by american resources currently off limits because of dated ecofascist prohibitions, companies would take the risks to get serious about alternate technologies, in fact they won't do it otherwise. There's no way it can be completely painlessly, just like other national emergencies couldn't be painless, but it has to be done, and once it is done, that's the end of the opec looting, the political blackmail of the whole world by middle east theocracies and many other problems.

I'm not sure what alternative technologies you would be referring to. Further, many many oil companies already have invested billions in alternative energy sources... the problem is, none of them are a fraction as good as oil. I think it's a mistake to make particularly damaging policy in the possibly vain hope that some magic energy source will spawn into being

.

C'monnnnnnnnnn - this is the country that sent men to the moon. We win most of the science Nobel prizes. Do you want us to sit on our asses and wait for the inevitable day that the house of saud is overthrown by IFs and the oil is cut off completely? The technology that I think would be made to work is gasification of coal. It's ancient hydrocarbons just like oil, the self-same stuff, but with a different geologic history so it didn't get all the way to oil. As for the oil companies you are talking about - they make a minimal "alternative energy" show for PR in their advertisements.

The free market can't make energy exist, if it doesn't. Making a military tank that can go under water, travel at 50 MPH and hit a moving target while it is moving itself, is where the free market shines. Send out the call, and companies all over will jump at the challenge.

But it DOES exist. The US has huge reserves of coal - it simply hasn't been worth the risk before. The US can either

1. Continue the slow bleed of our wealth to saudi arabia for the next 100 years, with all that that implies, or
2. Wait like bumps on a log for the day when everything is cut off, or
3. Create the economic conditions that will cause the REAL - I say REAL - alternate energy sources to be created.

 

[Libsmasher]

continued

But replacing an energy source is a whole different ball game. You can't just invent energy. It's has to be found and harnessed. Scientifically Oil is a very hard act to follow, and so far it hasn't. You simply can't find a raw energy source as viable, durable, transportable, and as adaptable as oil.

See above.

Again, I don't think it has to be done. Why not just get our own oil, and then kiss OPEC goodbye forever?

Uh, because we don't have enough?

I don't even understand your idea at face value. Why do we want to get rid of OPEC??

Let me count the ways:

- they've looted countless billions of dollars from us
- they distort our foreign policy
- they make us dependent on their whim
- they can trigger disaster in the US by cutting us off

Like I said before, a forced artificial increase in energy cost domestically, will only give our international competition a huge advantage over domestic companies. There will be a huge sucking sound of companies moving over seas.

We can make that up by all the OTHER things that have wrecked our competitiveness - irrational immigration policy, failed government schools, "affirmative action", burdensome corporate taxation, etc.

See if the goal of your plan is to increase oil prices to spur alternative energy research... well isn't that what's already happening? The price of oil is going up so funding of alternative fuel research is increasing? Why not just leave it the way that it is! The difference between your plan and the current situation is, our domestic companies and our international competitors are paying the same for oil, thus we are not losing jobs over this (though we are for other reasons, but adding a new one isn't a good plan).

Do you ever get the feeling nobody is listening to you? I've said this about five times this thread:

The oil prices are set by OPEC at just the right level to plunder us, but not so high as to trigger a REAL determined alternate energy search.

 

[Pidgey]

Fission and later possibly fusion are about the only other energy sources that we've found that bring a high enough EROEI or promise of same to be viable on the scale that we require. Unfortunately, they're more well-suited to convert to electrical power and we don't begin to have enough transmission capacity to power our nation at its current energy consumption level that way.

At these prices, it will be quite economic for everybody with access to a drilling rig to go looking for more as well as for folks to attempt to invent methods to increase carbon energy conversion efficiencies.

Probably the worst problem in the short term is that contracting economies can destabilize regions such as to cause distribution upsets far worse than any looming "below-ground factors".

Pidgey

 

[Libsmasher]

Fission and later possibly fusion are about the only other energy sources that we've found that bring a high enough EROEI or promise of same to be viable on the scale that we require.

EROEI is huge for fission. As for fusion, they've been trying to get that up to a commercial level for about 60 years - I don't think it will ever happen.

Unfortunately, they're more well-suited to convert to electrical power and we don't begin to have enough transmission capacity to power our nation at its current energy consumption level that way.

I used to read about supercooled transmission lines - I guess that's still pie-in-the-sky.

Probably the worst problem in the short term is that contracting economies can destabilize regions such as to cause distribution upsets far worse than any looming "below-ground factors".

Or maybe IFs can destabilize them?

 

[newlibertyparty]

Opec doesn't set the price of oil to begin with, comodity traders do! Opec just gives the information to them to buy oil, that is why gasoline in Italy can be 120 dollars a barrel, and here, 130 dollars. THe comodity traders are getting rich, and so they keep on making the price higher. It's not truely OPEC's fault if we have High gas prices

 

[Andy]

First - thanks for an intelligent post. Most of the time around here, its stuff like "Did ya here about McCain's gaff today?"

Agreed. "I heard somewhere someone said something sorta like saying... blaw blaw... which means... uh... Bush sucks." Boring lame stupid posts.

No - a free market ends when suppliers create combinations to control trade - if OPEC isn't that, it isn't anything.

You would suggest that if Canada doubled output and sold it to us, that somehow OPEC could do anything about it? Or if we doubled output, OPEC could do what?

I don't think so - again - opec has 2/3 of the world's proven reserves.

Oil reserves are rated on a confidence level. P90-P80 is 'proven reserves'. In order to get this rating, you must have the well in the ground, pumping oil. Below that rating, is P70-P60, we know it's there but we're not getting it, or it's hard to get. P50-P40 there is tons of evidence it's there, but we haven't checked, or we have checked but it would require heavy investment to recover. Around P10 is, in general it looks like a good spot, and we should check, but we're not even checking.

Currently, OPEC might have 2/3 of the world's proven oil reserves, but that's simply because they are drilling for it. That's it.

We have huge untapped reserves. Again the US geological survey estimates there is about 2.5 trillion barrels of oil in our land alone.

And “recoverable reserves” — known oil resources capable of recovery, but with more cost and technical difficulty than proven reserves — hold several thousand times more. These resources include: light oil in place (293 bbo); heavy oil (81 bbo); oil sands (80 bbo); and the mother lode, oil shale (2,118 bbo). Add the 21.8 bbo proven reserves and 30 bbo off-limits, and the total 2.6 trillion barrel endowment of American oil resources would support U.S. demand for thousands of years.

and yet.... we just flat out, are not getting our own oil! So the reason OPEC has such a huge percentage of proven oil reserves is.... US = stupid!

No, what's true is sometimes some them have broken ranks, but most of the time they haven't. And that's a BIG mechanism. At least once in the past, I don't remember exactly when, OPEC punished a renegade member who exceeded it's OPEC quota because it wanted more revenue. SA flooded the market with oil, and the renegade country's revenue didn't increase.

That was kinda my point. They can't punish one member. They can't really do anything to any member... except... the same thing that any country anywhere in the world can do... either cut or increase production... just like we can, and Canada can, and Russia can... OPEC has no ability to enforce it's quotas on any nation inside or outside the organization. None.

Look at this again: Note that every single country in OPEC is exceeding their quota, other than the countries that can't meet their quota, and the Saudis. Doesn't look like their working together to me.

All that shows is that when OPEC doesn't act like a cartel, it effectively isn't a cartel and doesn't have a cartel's powers, for the time being.

They try to, no doubt. But honestly, short of asking the U.N. to invade an OPEC member to enforce the quota, they really can't do anything.

Where does that come from? They have untold wealth - I don't see why they couldn't increase production.

Production capacity is the max amount produceable. As in, every well running full time. They could have ten trillion in gold coins littering the floor of the palace, but it still takes time to drilling and setup a new well, just like here in the US. If the government unloaded every regulation holding the oil industry back, it would still take 5 years before a new crop of oil wells started moving crude to the market.

They are investing in new wells. So is Canada and Russia. China also is starting to really invest in oil production. We on the other hand... well we're being stupid thus far.

Do you mean the domestic market? I don't think it would affect prices that much.

Well yes, but internationally too. IF we produce our own oil... who do we not have to buy from? IF we do not buy international oil... that lowers demand. The price of world crude oil markets would crash.

(see proven reserves and OPEC working together from above)

Apparently, we have different definitions of "skyrocket" - and I call for a more slowly decreasing import quota - a few percent the first year, rising to 5% a year, maybe. You worry about a 50% increase - here's what to really worry about: Obama gets elected and does the iraq cut and run, iraq is gulped up by iran one week later, the now much bigger iran looming over kuwait and saudi arabia finlandize those countries, and cut off ALL OIL to the US? THEN WHAT??

Right, and how would OPEC cutting us off, be difference from US cutting US off? Either way the result would be the same...

I agree with all that except cutting us off. They can't cut us off... it's a world market. If they refuse to sell to us, we'll just buy from someone else. That was proven during the 70s. When the oil embargo happened, Saudis would sell to... let's say, Russia, and we'd buy it from Russia without it ever leaving the barge. Even OPEC themselves admitted the embargo was for show only. Once that oil is loaded on the barge, and the barge leaves the dock... there is nothing anyone anywhere can do to stop it from going somewhere.

FYI, the whole 70s energy crisis was simply due to bad policy. The government had price controls on gasoline... which as anyone who does any research on price controls knows... always, as in every single time, leads to shortages.

And what looting will THEY do? What hiked up price? What poltical blackmail??

They will do the same thing they always have. Sell oil. You think if we don't buy it, someone else won't either? Of course they will. Worse yet, while our cost rises, the worlds cost will decline. So not only will others buy it, but it will be cheaper for them, while we pay more. Very bad for the economy.

C'monnnnnnnnnn - this is the country that sent men to the moon. We win most of the science Nobel prizes. Do you want us to sit on our asses and wait for the inevitable day that the house of saud is overthrown by IFs and the oil is cut off completely? The technology that I think would be made to work is gasification of coal. It's ancient hydrocarbons just like oil, the self-same stuff, but with a different geologic history so it didn't get all the way to oil. As for the oil companies you are talking about - they make a minimal "alternative energy" show for PR in their advertisements.

Even if the Saudis were over thrown, it's still a world oil market. We can get the oil, one way (buy from them) or another (buy from someone who buys from them). They are not going cancel oil production, that where all their money comes from no matter who is in control of Saudi Arabia.

Coal gasification is a bad tech. That's why few use it. It requires too much energy to convert coal into gas. And the gas you end up with, has less potential energy than the original coal. That's why coal gasification plants have closed down in the past... they were not profitable. Light Crude oil can be refined for under $2/barrel. Heavy crude for only $13/barrel. You'll spend vastly more than that just heating the coal up to temp for conversion.

But it DOES exist. The US has huge reserves of coal - it simply hasn't been worth the risk before. The US can either

1. Continue the slow bleed of our wealth to saudi arabia for the next 100 years, with all that that implies, or
2. Wait like bumps on a log for the day when everything is cut off, or
3. Create the economic conditions that will cause the REAL - I say REAL - alternate energy sources to be created.

Like I said... alternative energy can not be created. Physics my friend. Energy can not be created nor destroyed, it can only change forms. Further, what economic condition would you create? High cost of oil by reducing supply? Aren't we already facing high cost of oil without artificial shortages?

I propose option 4: Get our own oil. Then ignore the rest of the world completely.

 

[Andy]

Opec doesn't set the price of oil to begin with, comodity traders do! Opec just gives the information to them to buy oil, that is why gasoline in Italy can be 120 dollars a barrel, and here, 130 dollars. THe comodity traders are getting rich, and so they keep on making the price higher. It's not truely OPEC's fault if we have High gas prices

True true... I would also add that the cost of shipping to Italy from the middle east is a fraction of shipping it across the planet to the US... but of course we are being stupid and not pumping our own oil... so we must buy it from somewhere.

 

[Andy]

Actually that's NEAR to what I said - they keep it ABOVE what the free market price would be - otherwise their would be no point to their organization, but not TOO high. But the spot price today is $138/barrel.

Since the late 90s, Saudi Arabia has openly stated their goal of keeping the price around $50/barrel. I don't have a link for that, but I remember reading that many times in the late 90s when the price went down to about $10 or so a barrel.

 

[Libsmasher]

Opec doesn't set the price of oil to begin with, comodity traders do! Opec just gives the information to them to buy oil, that is why gasoline in Italy can be 120 dollars a barrel, and here, 130 dollars. THe comodity traders are getting rich, and so they keep on making the price higher. It's not truely OPEC's fault if we have High gas prices

Uh, no. Traders operate in the framework of artificially limited supply and producer collusion established by OPEC.