At this point OPEC only exists in theory, because in practice each country produces as much as they want. None of them are willing to absorb both the lower prices AD having a smaller market share because all the other countries are cheating. Well, to be fair, USA's ever increasing oil production via fracking has put a serious dent into OPEC's market share and thus it has reduced their influence, even if they still acted as one.
Exactly, and then you have countries like Venezuala and Russia that are having huge financial issues at the moment, there is no way they go along with any production cut proposals, they simply do not have the ability to suffer today to benefit tomorrow. Their today is in too bad of dire straights.
I'm perfectly okay with how things are going with oil prices and whatnot right now. Sure, it's giving the stock market some jitters, but it's still more of a positive than a negative for daily life. My stocks haven't been too hammered by the oil issue or the small stock market dip we've seen in the past couple weeks. I stopped caring about what OPEC did a long time ago, and I'm glad they feel a little powerless at the moment.
I'm hearing more and more legit experts say the global drop is largely due to too much oil being produced here in the US. Regardless, it won't last forever.
Lower gas prices have certainly been beneficial to the economy. Helps other sectors of the economy when folks dont have to spend so much money filling up. Here in S.C. gas is around $1.70 per gallon. Cerainly hope this cheap gas sticks around a while.
The increased production in the USA certainly had an effect. We have to remember that 5 years ago USA was a huge importer of oil, whereas in 2015 they were supposed to actually balance it out and be almost self sufficient. Some were even talking about USA being an oil exporter in 2015. I think this is one of the major worries of the Saudis as both their income as their political power is pretty much based on the oil they control. If the USA doesn't need them anymore it certainly isn't good for them, thus this whole drop in price could be a) see how much they can affect the markets and b) force the US oil producers to slow down.
I agree that people are going to drive when they "need" to drive. They still need to get to work and so on. But I disagree that it doesn't affect them. If the price gets too high then people in lower paying jobs won't be able to afford to drive. When the prices go really low, they can start to drive for the fun of it. This will give them more money to drive more or more money to spend more. For some it will just allow them to survive at all. I track my fuel mileage in my Jeep. I have been doing it since I bought it in June of 2014. These prices changed my cost for a tank of fuel to drop by $30. Between driving to work and weekend driving, I can use a tank a week. So during a normal month I would have $120 extra in my pocket. Low prices can hurt oil production which can cause job loss. With no job it doesn't matter how low the prices go. I'm trying to find a job out west (Canada) so I can earm more money. But with the low prices it looks like that could get harder. Companies out there are cutting their budgets. James
Not to go off on a political tangent, but they brought this on themselves by allowing their citizens to financially support terrorism. I know ol JR and I will disagree with this, but I do think even the liberals in congress are allowing more drilling just because they don´t like us politically being handcapped when dealing with Saudi. In their eyes, drill-baby-drill is the lesser of two evils.
That's true. The US has become almost self sufficient which has removed a lot of the demand for the oil produced elsewhere. The issue for oil is also the fact that renewables are becoming cheaper and cheaper and they're eating into oil's demand. If electric vehicles become more common oil is going to be even less demanded.
I read recently where some members of OPEC were warning about $200 oil. I think that's a little far fetched. They are probably fear mongering because they've taken such a hit over the past few weeks and months. I don't see oil going that high unless something really catostraphic happens and we have an energy crisis. Gas prices have creeped up a bit in my area, but they are still off the highs of earlier this year. OPEC just doesn't have as much power over energy prices as they use to. That'll continue if the United States continues it's move towards energy independence.
