The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

DJ OPEC Secretary General: Sees No Good Reason For IEA Oil

Posted by WARREN MOSLER on June 27th, 2011

Looks like some OPEC infighting.

The only way OPEC could block Saudi attempts to lower price would be production cuts beyond the Saudi’s ability to increase supply.

In the past, OPEC has never actually been able to do that, as apart from the Saudis the rest pretty much always pump flat out even after they agree to cut.

I suspect the Saudis and Obama also know Lybia will be back online soon with another 1 million barrels a day make it that much more problematic for the rest of OPEC to cut sufficiently to get the price up.

And the US and the Saudis probably also know world demand is falling short of forecasts, or they probably wouldn’t have undertaken the price cutting actions.

*DJ OPEC Secretary General: Sees No Good Reason For IEA Oil Release
*DJ OPEC Secy Genl: Wants Immediate Cessation Of Stocks Release
*DJ OPEC President Ready To Call Emergency Meeting If Needed
*DJ OPEC President: Hopes Oil Market Won’t Warrant Emergency Meeting

3 Responses to “DJ OPEC Secretary General: Sees No Good Reason For IEA Oil”

  1. GLH Says:

    Has there been a real shortage of oil or was the rise in price due to speculation which may have been the result of QE 2?

    Reply

  2. pebird Says:

    Warren:

    I’ve read a lot where the release from the Strategic Petroleum Reserve was only one day’s worth of consumption, so it didn’t mean anything, etc.

    But isn’t there an impact on psychology in that the timing of a release, say coincident with a particular trading date, could impact speculators. Can we see that release as a signal for traders to get out the market, that game is over?

    Reply

    beowulf Reply:

    @pebird,
    “I’ve read a lot where the release from the Strategic Petroleum Reserve was only one day’s worth of consumption, so it didn’t mean anything”

    If you paid $1000 a year to subscribe to the St. Croix Oil Wire, you’d know that the Saudis are the price setters for oil but prefer being modest about their market power. The Saudis are cutting the market price on behalf of the US (Saudi Kings and US Presidents need each to stay in power). The SPR release is a misdirection so when the price moves down people will think it was because of the SPR action.

    And no, there is no St. Croix Oil Wire, that’s just what I’ve gleaned from reading Warren’s comments here. :o)

    Reply

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>