people are not talking about this but most OPEC nations dont enforce their quotas, they just hope the others do it and sell above it to raise more revenues
Chavez has got to be getting nervous...has to account where he spent the loot and now the commie benefectors in South America are going to say "what, no more..?" and dump on his socialist , dictatorial agenda. A stray bullet may be the best way out for this nut. Own some BPT ,but would not mind if Chavez et al get crippled.
Correct on the first three points, AND wrong on the last. NYMEX crude oil futures contracts go out much farther than 6 months! http://www.nymex.com/lsco_fut_csf.aspx?product=CL
The venezuela heavy sour crude (one of the worst quality in the world) is trading at $30,65 in the spot market and will be quote next monday around 25 USD per barrel in the cash market. the minimum oil price Chavez needs to sustain his economic policies range from US$120 a barrel to US$65. Chavez may have to cut domestic handouts and foreign aid. The first items likely to go will be arms purchases from Russia, oil subsidies for Cuba, and job-creating local projects such as bridges and subways. Venezuela may be poised to repeat the economic collapse it suffered in the 1980s at the end of its last oil boom. Former president Carlos Andres Perez, employing policies similar to Chavezâs, lavished petrodollars on public works projects, foreign aid and nationalizations in the late 1970s, setting the stage for a 1983 currency devaluation and spending cuts that sent millions of Venezuelans into poverty. Below US$75 a barrel, itâs likely that Chavez will devalue the bolivar for the first time since 2005, sparking a surge of inflation and a drop in real wages because of Venezuelaâs reliance on imports. So yes, opec members are in deep shit. The Only people making money right now in the Oil industries are guys like Marc Rich, Trafigura, Glencore, Shell and Exxon buying a lot of oil in the cash physical market and selling that oil in the foward market with this massive contango. those guys are buying Physical Oil now at $38 and selling the future contracts for delivery in theforwards months, (especially december at $56.) After taking into account storage and financing costs those guys will earn about 14%. Take a look at the Brent/WTi spread right now.
Oil should have definately surged $10 yesterday when OPEC announced their biggest-ever cut of 2.2 million barrels per day. But Oil did not surge, it started falling? Russia has stopped exporting Oil. Russia's unexplored/undiscovered Oil reserves are bigger than Saudi arabia. These Oil Reserves can feed worldwide demand for next 40 years Now Crude oil has fallen to $38 per barrel. I think there is some "major hidden problem" within the world economy. Something "BIG CRASH" is going to happen.
Well if OPEC members are under strain, they will bring many people with them.. Russian are pushing ukraine to pay its debt or else they cut gaz supply. If east-europe comes under destabilization because of that, imagine the strain on the borders of western europe? They would have to build refugee camps where people usually had relative tranquility, this would push racism much higher and France would face another wave of riots. Since growth is not there to finance welfare to keep the youth relax, they would have to borrow to the world bank. I am not sure the world bank and the IMF have the room to loan so much to so many people. A world government or a world war..
I agree. World War is high possibilty is year 2009. "Mother Earth" does not have the resources to support 7 billion people. So the "global financial crisis" was inevitable (had to happen). "Global financial crisis" will happen again in future and it will continue to happen. Human beings and even $100 Trillion cannot stop "Global financial crisis".
Either that or a big "January Surprise" ( read international crisis), I wouldn't dare be short oil...