Basically Saudi Arabia walked out of the OPEC meeting yesterday after being fed up with Venezuela and Iran. Could OPEC begin to fall apart? I'd love to see the power of Iran and Venezuela weaken. Will this result in lower oil prices or is this event meaningless in the grand scheme of things?

MSN Money said:Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran. As the world's largest crude exporter, the kingdom in the desert took its ball and went home. As the Saudis left the building the message was shockingly clear. According to The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil." OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude as due to "over-supply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the US and EU for a time. That political battle is only at its beginning. The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. That breadth of that deposit has now expanded. OPEC needs that Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member it forfeits its leverage. OPEC has made no announcement to the effect that it is dissolving, but the process is already over

The death of OPEC

Not the first time OPEC is fighting within itself. They are as unified of a group as people try make them out to be. Greed has undermined their common goals numerous times.

"Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. That breadth of that deposit has now expanded."It will be interesting to see what Brazil does with their sugar cane/ethanol industry when their new found oil reserve comes on line.

They currently supplant only 15% of their petroleum needs with ethanol, while devastating millions of acres of land and polluting numerous rivers.

Xnarg said:It will be interesting to see what Brazil does with their sugar cane/ethanol industry when their new found oil reserve comes on line.

They currently supplant only 15% of their petroleum needs with ethanol, while devastating millions of acres of land and polluting numerous rivers.i'm guessing they'll look at the numbers. if it's cheaper to use ethanol due to high oil prices, they'll sell the oil. if it's cheaper to burn the cheap oil "in house", they'll do that. Or the third option would be sell the rights right away and have one gigantic H&B party, Brazil style.

How come the Saudis do not invest in nuclear energy? Their oilfields are not going to last forever.
Saudis and the United Emirate are freaking rich at this time. It would do you good to marry one of their wealthy men. Hehe.

xoneinax said:sweetbutter said:Saudis and the United Emirate are freaking rich at this time. It would do you good to marry one of their wealthy men. Hehe.Yes, and wives dont have so many duties to perform when they are all married to one man
, and I'm muslim.
The advantage of polygamy is you can marry multiple women. The disadvantage is that you're married to multiple women.

I'm sorry but it is not true that all Muslim men are polygamy, only the affluent one that can support such a relationship. Most are affluent and quite generous. I think it was God intended for them to inherit such natural resources, must be descendants of the Three Kings. Lucky bunches.

sweetbutter said:How come the Saudis do not invest in nuclear energy? Their oilfields are not going to last forever.They probably have enough oil to last another century, and the only reason they'd invest in nuclear would be to build bombs to use against Iran (amazingly, not against Israel, their secret buddy in any fight against Iran).

Smart move by Saudi Arabia. A lowered oil price may curtail/stop development of alternatives, which can totally screw up their oil income.

I think it's time to raise the federal excise tax on gas, and perhaps institute a modest tax for other uses as well. Excise taxes on gas are needed; there's no point to have cheap gas when the roads are falling apart.