|
If OPEC wanted to keep the price of a barrel around $70 why did they not hold an "emergency meeting" to stabilize the cost down from $147 in July (more than 100% higher than where they would like it to "stabilize")?
Saudi Arabia produced the most oil it ever has when the cost of a barrel was at its highest. Do you think they did that so because of supply and demand or were they "high on the hog" making as much "expensive" barrels as possible before prices dropped? If you sold widgets and the price of widgets went up 100%+ but demand was dropping would you produce more widgets than ever?...of course you would because you are getting the most money you've ever received for your widgets...ahhha...sounds like a company to me!
I don't know why so many people are quick to defend OPEC regarding stabilizing the price of oil and then just as quick to complain about oil companies posting record profits in the past year. OPEC should be viewed as a company (that's what they are). The countries (OPEC "board members") profit directly from that which they produce. They are not a regulatory agency (like the US Fed) simply setting prices or interest rates to balance the world economy.
If you think OPEC cares about stabilizing the cost of a barrel of oil around $70 I have a bridge to sell you in Brooklyn. They like the cost of a barrel of oil to be "one tick" under consumer panic (what occurred when it climbed to $150 this summer).
|