The leaders of Saudi Arabia, citing demands from OPEC to cut production, have left the oil cartel to "meet the demands of the market."
This is a serious blow to OPEC because Saudi Arabia is the largest exporter of oil in the world. This coupled with a new oil field found in Brazil will limit the cartel's ability to control the supply of oil.
OPEC has made no statement about dissolving, but this will seriously inhibit their ability to control the price of oil.
I've been reading news here for years, but I think it's the first time I have contributed. Just a progressive trapped in the bible belt of the USA. Thanks for keeping such a good looking, informative site up and running.
"Anyways, I am having trouble deciding on what to think about this article. I don't know if this is good or bad news."
well that depends... do you like small groups having heavy influence globally? they OPEC as an organization controls enough oil that they can influence price on a whim.
Saudi Arabia, being one of, if not the largest producer of oil, leaving OPEC, takes a large portion of their potential influence away, and it addition it could even counteract it, as now saudi arabia is free to pump more oil as much as they want (providing they have buyers or a place to store it... and i'm sure they're running low on neither.) which in the theory of supply and demand (which is how the economy is SUPPOSED to work) will lower the price.
Saudi Arabia is in a particularly unique position; like russia is to do this, because they can't afford a war against Saudi Arabia because Saudi Arabia one of america's only allies left in that area and they hold quiet a bit of US debt... not to mention the bush family and the saudi's go way back.
so to me, this looks like a win-win for everyone except OPEC... and it not to often i agree with Saudi Arabia.
Can't believe I'm saying this... but... for once, I agree with HAVOC? Ha, no but seriously - Havoc is correct. Win-win for everyone but the OPEC scum. -np-
Welcome aboard matey! The poop deck awaits, wear your souwester as the poop can get deep.
You now have the ability to change the world.....well maybe the opinions of some real geeky nerds.
As for the Saudis, I think they see the light at the end of the tunnel. Too much research is being done and sooner than later major breakthroughs will occur in electrical storage and gasoline engines will go the way of the dodo bird. I love my electric trolling motor on my boat, quiet, dependable, no exhaust and clean. I would prefer electric over gasoline any day if it had the range. They know that soon oil will be just a nasty poison instead of black gold. Cash in while you can. The end is near.
Ok. I just finished reading one of the posts (and comments) in the political section and after reading all of that, then reading this with everyone *agreeing* with each other, I'm in a bit of a state of shock.
So, I thought I'd stir the pot a bit.... (MUWAHAHAHA!!)
Ok, Saudi has left OPEC. I also agree that is a good thing. I think Canada (who is the US's 3rd largest oil supplier) should *also* leave OPEC and put forth legislation to federally regulate the cost of crude based upon cost of production and a fair profit.
If you can buy your oil from Canada for $50 a barrel, pretty much the rest of the world would have to follow suit.
Now *that* would be a good idea!
(Oh, and just to make everyone happy... In this legislation the price of crude would have a certain dollar amount per barrel go to alternative fuel research/infrastructure and a certain amount go to helping "preserve" the environment or some stuff like that)
Didn't think that Canada was part of OPEC according to wiki OPEC consists of: Algeria Angola Ecuador Iran Iraq Kuwait Libya Nigeria Qatar Saudi Arabia United Arab Emirates
Anywho, i think this is great, OPEC is a greed evil cartel, and they seem to be quite stupid as well, the world is getting fed up with the price of petrol which is caused by there artificial inflating the cost of oil, OPEC are digging there own grave.
What i find interesting is that if you put china and India together you have over half the worlds population, 8 x USAs population, and yet India and china combined only use half the amount of oil that America does. Were talking about 2 1/2 billion people using less oil then the 300 mil Americans thats just fricken crazy. Americans always seem like the first people to have a cry about petrol prices when countrys like Australia and the UK are paying $1.37/L & $2.29/L the US is pay 97c/l on average. Now i understand that there should be some kind of bulk discount considering use are consuming so much but america is like an alcoholic and the rest of the world are like casual drinkers, some one needs to sit down with the US and say get your shit together or your not aloud to come to our bars any more, you pick fights and you stink. Worst analogy ever i know, i just started rambling on, there was a point in there somewhere.
I may have said this before, but I really don't think the rest of the world understands how dependent on cars the U.S. is. Many of our cities were built, and most have been built up, after the car and taking the car into consideration. We planned our cities as though people would always use cars.
That's why Americans use so much more oil. How many Asians and Europeans live more than 20 miles from their workplace? But I know Americans who drive double, triple that to get to work, Monday through Friday. And it's not just work -- the nearest grocery store to me that I can stand is about five miles away, too far to go without a car.
to your point, the auto industry was responsible for that I believe, as they were the ones who were able to buy out congress over the railroad industry on the grants/contracts to improve and connect our cities. I am pretty sure that's what happened but can't find a link to it at the moment...
As a Brit living in the U.S., you're in a unique position to comment on what I was saying. Have you noticed a greater dependency on cars in the U.S. than in the U.K.?
Off-topic -- the way I read the source, Saudi is parting ways with OPEC on the issue of production, but it doesn't seem that they've actually quit the club.
You are completely right, at least in the part of America I live in.
I live in a nice three level condo. The garage is right in the building so I don't even need to go outside to get in my car. I just walk downstairs and get in.
I drive out of the complex, and even though I am just 1 mile from the main mall, there are sporadic sidewalks along my road. In truth I have never walked the half mile to the end of my road. In fact I've never walked beyond the boundaries of my complex.
When I first moved to America, I lived in an apartment complex, in the next city over. There was a hairdressing salon next door to the complex. It was probably a five minute walk, if I were walking slowly. I never walked it. I'd get in my car and drive there!
Similarly once you got to the main road through the city, there were no sidewalks. You'd have to walk in the emergency lane.
Now I've been to parts of America more set up for pedestrians, but in many of the smaller cities, walking isn't much of an options.
I have drive though banks, drive though dry cleaners, drive though fast food, drive though pharmacies, and restaurants I can drive to and park, and the waitress will bring my food to the car (to take home).
To say America is a car culture is an understatement.
Back when I lived in England I used to walk into the downtown area of the town on a regular basis. It took 15-20 minutes. But I thought nothing of it. There were wide tree covered sidewalks and cycle lanes. Most of the stores couldn't be parked outside of anyway. So you'd park in the middle of the town if you did take your car, and then walk around.
As for public transport, in the non-major cities like mine, it is almost non-existent. There are some crappy looking cabs, that I understand are expensive. There is a bus, but it appears to be occupied only by homeless and otherwise disadvantaged people. If there is a train station around here, I've never heard of it. And I've never seen a Greyhound station either (in this area).
In rural East Tennessee if you don't have a car, you are screwed. Every adult has to have one. Sharing a car, using public transport, walking, is just not really an option. Which is probably why I have gained a good 20lb since moving to America.
As I was reading this and the source all that ran through my mind was "crap".
This is one of those things that will shape the world, for the good of it, or for the not so good.
I can't see OPEC relinquishing control so easily, without having some kind of attempt at recruiting other nations that tap into their oil fields to try and regain control. They stand to lose literally billions of dollars from what has happened.
Personally, i'm going to sit back and watch what happens here for the next few months, especially with the holiday season coming up, with all that travel increase all over the world. These next 4-6 months are going to show where the Saudi's are going with this, and I hope that at least for the average consumer it means a little less hurt on the wallet.
Thanks for being so informative, from my side the problem looks alot more simple then it actually is. I know that in australia lots of people bitch about the transport infastructure but we still catch the train or the bus because it is more cost effective also traffic congestion can be a real pain in the arse. Perhaps the bigger is better mentality is partially responsible for the huge fuel usage, in aus V8's are kind seen as iconic but not many of us own one, i don't think they are as socially acceptable as 4wd's yet no one i know that has a 4wd actually goes 4wd'in.
if this is good in any way. I do believe this is probably master minded by USA, for USA and Saudians are simply acting on behalf.
We know OPEC has been throwing Euro as the Currency of choice idea around the market and that will further devastate American economy.
Chavez and Iran are saying it very openly, they would opt for Euro if OPEC would agree, USA is aware many countries will follow suit and all that USA stands for as the giant in global market will collapse.
Saudis economy will definitely follow the way Americans head, since they are a major allies of USA and everything Saudi is made in America.
This will only call for instability and I doubt if any of the OPEC members are seriously looking to sell at less.
--> <3 Thanks all, I was rushing it a little because I was sure someone was already on the story. Turned out well.
@sleeky- I live in central Arkansas, US.
And yeah, Our entire society is oil driven. Virtually all freight and private transit relies on it, and Mass transit in anywhere but a handful of cities is woefully inadequate. It's a big deal this year politically, but I fear that 51% percent of our population will be as foolish as they were in 2004, or 2000, or 1988.. you get my drift. Scary.
My Brother Leon recently lived in Sweden for some time. He traveled throughout Europe and found something extremely different to America: Most cities CAN'T allow automobile traffic! People have to park their cars so many miles away from the center of town and walk/ride a bike/horse/motorcycle/etc. into town to go shopping, get mail, what-have-you. So many European communities are not dependent upon automobile travel as the US is..
Large drop in oil prices just from the reaction from those oil speculators. They'll take one look at this and probably panic and sell sell sell... My prediction is that this will bring us back to under $100 a barrel within a week. w00t.
wow, that was fast, lol. Let's hope it dips back below $100 and stays that way. I want things back to the way they were, lol. Just 5 years ago, I was paying $1.50/gal. If we could get back down to that, man... I could afford to actually go places, lol (and spend my money on local economies, hint-hint@US Gov. lol)
You saved me from typing a rant. I wish the US could change its infrastructure to be more dependent on public transportation and walking. Maybe that would help cure our obesity problem too.
Like Allanthar was saying, in places like Sweden it's inconvenient to drive a car in the city and not inconvenient to take public transportation. I don't think most Europeans understand that. If I grew up in Stockholm or London, I think I would be a little perplexed as to why we cry about gas prices when driving seems like such a pain in the ass.
I looked into taking the bus, but it would cost me just slightly less than driving the 40 miles or so I drive a day. Might as well pay the extra 50 cents for the convenience.
Back in England, I have a friend, mother and a cousin who never learned to drive, and don't have a drivers license. Such is the state of public transport over there, you can get by without driving altogether. I think it's dumb not to have a license, but people do it.
Of course I'm not sure that England planned it that way. But with tiny narrow historic streets and buildings in many downtown areas, there is little choice but to pedestrianize it.
In America, roads were often built with the car in mind.
america has to be dependent on their highways because of the mass migration out of the cities when the highways were built, the birth of the suburban forrestq
The reason other countries are paying more for fuel than the U.S. is because their governments are taxing the crap out of their citizens. If you take away the government L. taxes of fuel, you now get close to the U.S. fuel prices.
The U.S. government makes Approx. .19 cents per gallon, the oil companies might make .24 cents per gallon, the states might makes .10 cents per gallon. This makes the prices < .60 cents per gallon of taxes in the U.S.
If other nations are paying $2.00 per leter for fuel, then they better cry to their local governments. Government controlled and producing nations are paying only <.30 cents per gallon for fuel.
I would love for this to be true I dont see anything in the source that shows the Saudi's have clearly left the cartel, they've only indicated that they will not honor the current production cuts. When searching the net for a better source of information only blogs.moneycentral.msn.com comes up.
You had a good article Arkie but the comment you made,"progressive trapped in the bible belt of the USA". I find alittle offensive being that I also live in the BIBLE BELT and realize that if I don't like it here there are 49 other states available to me,OR YOU.
I'll clarify. I'm not trapped in any physical sense- it's more surrounded by people that think the earth is 10k years old and coming to some catastrophic end ushered in by angels. I enjoy the south, we just have per capita, an unusually retarded population. If it wasn't for the sweet tea and hospitality, I would probably leave to one of the other 40 states not in the 'bible belt'.
