Why is oil price dropping?

Shannymara · Master Joined: Oct 04, 2004 Posts: 5096 Location: Oklahoma

As of Friday, 10 Dec. 2004, at 1PM CST oil futures are dropping substantially. Why is this happening when OPEC just announced a production cut? Anyone know? Thanks in advance.

Shannymara · Master Joined: Oct 04, 2004 Posts: 5096 Location: Oklahoma

I found one article in Bloomberg but it is hard for me to believe it would drop 3% plus based on this:

Aaron · Posted: Fri Dec 10, 2004 1:17 pm Post subject:

At anything over say $35 a barrel it's pretty difficult to imagine that any producer including OPEC would cut production for any other reason than lack of supply.

It's throwing money away ...
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UncoveringTruths · Intermediate Crude Joined: Nov 04, 2004 Posts: 848

slick50 · Tar Sands Joined: May 05, 2004 Posts: 85

Iran, Indonesia and Venezuela will be exempt from production cuts. Indonesia's production peaked in 1991 and is in steady decline, Venezuela has it's peak in 1998, Iran has been on the upswing these past few years. Go figure, not too much of what OPEC says makes sense.

Permanently_Baffled · Posted: Fri Dec 10, 2004 2:02 pm Post subject:

MarkL · Burnout Joined: Sep 13, 2004 Posts: 267 Location: US

nailud · Posted: Fri Dec 10, 2004 2:44 pm Post subject:

Markets always do surprising things on a short-term basis. The 200 day moving average of the oil price is currently around $42 and rising, so if it doesn't fall much below that, the uptrend should still be intact. As far as why individual traders are bidding the price lower, perhaps some of them are just finding out that there is some escess capacity TO cut.

MarkL · Burnout Joined: Sep 13, 2004 Posts: 267 Location: US

UncoveringTruths · Intermediate Crude Joined: Nov 04, 2004 Posts: 848

When the storage tank is running over the rest is just waste. We still don't know what the Saudi's have underground and there not going to tell us. The only OPEC memeber that I can see that has to cut production is the Saudi's however. The production cut is for the House of Saud. All the other producers are at Quota or declining. I am not sure about Kuwait though.

0mar · Posted: Fri Dec 10, 2004 4:50 pm Post subject:

I think the prices are dropping because this is the first bit of good news we have had all year practically for oil production. Investors are chewing this up.
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Aguyoffthedeepend · Guest

Guys....

I have been doing a lot of research on your 'peak oil' doomsday crap.(now that I got your attention) I dropped a load at first....then got my act together and did research on ALL topics relating too. The fact that the whole world has been searched out for oil is yes everyone 'impossible'. The only areas that have been searched out are the easy ones...<---meaning that oil comes out of the ground when you dig a hole for the fence post. Just two days ago in Alberta we found a 'new Major Gas' discovery. (funny how oil and gas prices go higher...oil companies are more inclined to do 'scouting')

Anyhow...without going off the deepend....People might want to do some research on how oil is created. Its funny how 'SURE' we are that its a fossil fuel. Just as sure i assume as those that thought the world was flat.
I just want to make sure that everyone understands how many dinosaurs had to live in a 'small' area like the Saudi Desert to make the amount of OIL that is coming out of the ground. Its not even possible. I understand that there is biotic formations found in the oil. But how does that really prove that oil was created over billions and billions of years by dinosaurs that are so huge that if they were all crammed together in one area they wouldn't be able to survive because of how much food they consume?!
Nutty!

How much do we know about the bottom of the deepesest ocean? In reallity NOTHING...we have hardly even scratched the surface of whats down there.

Now how much do we know about the middle of the earth? Again really nothing as the deepest we have been able to drill down to is something around 12,000meters. Yet we are 100% sure that oil is ONLY produced one way under the earth. I wouldn't discount the USSR's research.

I know you all feel like your eyes have been opened....by this peak oil. but open them wider and question everything... Thats what I did...and I found quite a lot of interesting information that balances out both sides.

Yes...oil will get more expensive as the easy stuff runs out...but I would expect that.

Now the real problem is major terrorist attacks against Saudi interests...thats the only way I can forsee your doomsday to come true.

Phil · Posted: Fri Dec 10, 2004 7:25 pm Post subject:

Will someone please destroy this moron who thinks oil comes from dinosaurs.

People who speak from a position of ignorance really freakin piss me off.

trespam · Posted: Fri Dec 10, 2004 7:40 pm Post subject:

Guest · Posted: Fri Dec 10, 2004 8:01 pm Post subject:

Agreed. It is pointless going over the arguments that have already been hashed out at length . Simple research by the ignorant one would decribe for example why oil cannot be found deeper than a specific depth etc.