Originally posted by ZoomZoom Diva:
OPEC does not set prices, they take them just like everyone else. The current prices are much higher than OPEC would like them to be based on the paranoia of commodities traders and speculators.
Originally posted by sigma:
Originally posted by Kremithefrog:
Originally posted by Kremithefrog:
OPEC controls production aka controls most the cost of a barrel of oil.
http://www.truthout.org/docs_03/092603C.shtml
Cut production, prices go up. 
1> That thing is more than 3 years old.
2> OPEC has never been effective at controlling the output of even it's own member countries and even worse at controlling the price of oil. OPEC provides suggestions to its' member countries, nothing more. In fact, OPEC production went UP after that announcement you linked to a record of over 30 million barrels just a few months later. They wanted to cut production by 9% and instead it went up some 20%.
But what happened to the price, despite OPEC output increasing by 20%? It still went up. Gas prices doubled, despite the fact that OPEC production went up 20% to record levels of output. Why? Because unless they announce some huge cut in production (and their members actually follow through, which almost never happens because they want to take advantage of the rising prices), OPEC pretty much hasn't a thing to do with the price.
3> OPEC doesn't like high prices. Plain and simple. If they could get them lower they would. They're producing as much as crude as they can, they're revising reserve estimates (almost certainly lying about them in the process), and trying to provide optimistic scenarios to drive the prices down.
Why? Well, what do high oil prices do? They drive us to alternatives. That's certainly not in OPECs best interest. As soon as we no longer need oil the Middle East is 100% useless to us. OPEC wants oil closer to $40, because at that price they maximize their return and practically kill any significant interest in alternative energy.
Finally some people that get it. OPEC is not some evil organization that makes oil prices high. Ever since OPEC kicked out the oil companies that were raping oil producing nations, the oil companies only had one way to make a profit; that is through the refining of the crude oil. It is no wonder that no new refineries have been built in the US since the 70's. While the have record profits they refuse to build new refineries. They say no one wants them in their "backyard," so it costs more to keep the existing ones running at 90%+ capacity. I am sure there are plenty of places that could have new refineries built and not be in someone's "backyard."
This is pure capitalism at its worst: price gouging.
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