Arab and Muslim petrolocracies planned the future on gouging the west with sky-high oil prices. After $150 a barrel oil ruined the world economy, oil prices plumetted. These countries are stuck with budgets that plan for luxuries like artificial islands and atomic weapons programs to wipe out Zionism and America.
In reaction, they are cutting production in order to try to retrieve their loss. Of course, this will only sabotage world economies further and accelerate the search for petroleum alternatives. The long term price of oil, in adjusted dollars is $20 a barrel, and that is fairly close to its fair value, including the highest extraction costs, transportation and reasonable profit. Cutting supplies in a dead market ignores market economics and won't raise the world demand. These countries will discover that the demand for anything is elastic. It's true people need oxygen. But if you raise the price of oxygen to $100 a liter and they can't afford it, most people will just suffocate to death and you won't have any market any more.
26/02/2009
CAIRO (AP) - The United Arab Emirates' official news agency says the Abu Dhabi National Oil Company has announced it will cut oil shipments to customers starting in April, a move aimed at shoring up crude prices as the global downturn eats away at demand.
WAM reported Thursday that ADNOC will enact 15 to 17 percent cuts in supplies of its various crude grades, including Murban.
The move comes as the Organization of Petroleum Exporting Countries struggles to reverse a slump in crude prices despite its pledge to cut 4.2 million barrels per day from September production levels.
Several OPEC members say more reductions are needed, as crude still hovers about 70 percent below mid-July highs of almost $150 per barrel.
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