[ExI] Oil

John Clark johnkclark at gmail.com
Thu Jan 15 19:08:08 UTC 2015

On Wed, Jan 14, 2015  Kelly Anderson <kellycoinguy at gmail.com> wrote:

> > It's no great mystery, with oil prices super low OPEC's profits are way
>> way down, if they lower production profits would go down even more and oil
>> money is the only thing that is keeps countries like Saudi Arabia from
>> falling apart. Except for oil what does Saudi Arabia have that the world
>> wants?
> But in the past, OPEC (most specifically Saudi Arabia) has reduced
> production to keep prices from going too low.

Because in the past there was no slack in the production end of things so
when Saudi Arabia reduced production there just wasn't enough oil to go
around, so they could set oil prices at pretty much anything they wanted,
but with the huge increase in oil production by the USA that is no longer
true.  Saudi Arabia knows that if they reduced production this time it
would have little effect on oil prices and would reduce even more their
already drastically reduced oil income, and as I said without oil money to
keep their population content the country, especially their leaders, would
be toast.

>> when did Obama get the power to tell OPEC what to do?
> The US president can certainly be PERSUASIVE with people like Saudi
> Arabia. He can't tell them what to do, but he can suggest strongly.

All US presidents since Jimmy Carter have begged Saudi Arabia to lower oil
prices but it's never worked, they do what they want to do; but this time
there would be no reason to even ask because Saudi Arabia is no longer in
the driver's seat.

  John K Clark
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