How disgusting is OPEC? I know this entry is a few days late in coming, but the word going around is that the cartel wants to set a standard rate of $75 per barrel of oil worldwide. These dummies don’t understand that price controls do not work in the type of worldwide economic downturn that we’re seeing. From the article:
OPEC, which accounts for more than 40 percent of the world’s supply, will next meet in Oran, Algeria, on Dec. 17. In a statement after yesterday’s meeting in Cairo, the group warned demand will be “much lower” than expected a month ago. The cost of crude has continued to slide even after the group agreed last month to lower production by 1.5 million barrels a day.
There shouldn’t be a problem with reducing the amount of oil that is generated by the oil cartel since worldwide demand is decreasing. That’s fine – that’s simple supply and demand: when demand goes down, supplies do not need to be as high. However, to reduce supply of a vital resources to a point where prices skyrocket is unacceptable. The world is taking notice of what OPEC does and its people will respond in turn.
Remember last month when OPEC cut their production by 1.5 million barrels per day? The purpose of the cut was to drive prices higher. Instead, prices sunk a few dollars per barrel on the very same day the cut was announced. Thankfully, the people of the world are beginning to seriously consider alternative energy sources and they are moving in that direction in large numbers. This shift away from a petroleum-based life is what the world needs to cut off some of these middle eastern countries who try to dictate their financial needs upon the world.
Let’s hope that demand continues to decrease as consumers continue to purchase energy efficient vehicles, household items, and renewable/resuable resources.