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OPEC explanation

  • Wed, Dec 10, 2008 - 06:06am



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    OPEC explanation

Well, it basically boils down to supply and demand. If demand becomes light because Americans cant afford gas, its a forced conservation going on. OPEC is stuck between raising prices to meet OPEC country demands (they vary) by cutting back on production, possibly stimulating more conservation from people simply not able to afford to drive as much, or let it continue to go down. If they raise prices, they could usher in doom for themselves because it stimulates research to get us off of fossil fuels and forces people to drive less worldwide. If prices continue to lower, they damage what they think they need to make at ppb prices to keep individual OPEC countries where they think they need to be with internal economies.

To make it even simpler, they are greedy and want to continue to be greedy and get as much as they can out of oil. They will find a price point that makes them comfortable, and we can live with. They will test us over the next 6-12 months to see where that price point is regardless of inflation, recession, depression, hyperinflation or whatever.

So basically gas should go back up, but not to the above $140 a barrel prices we experienced in July 08. They will fall between what we have now and what we paid in July 08.