September 11, 2006
OPEC Sucks
Just when I start getting happy about declining oil prices, and gas down to $2.30/gallon, I see this article from the New York Times:
VIENNA, Sept. 10 -- What a difference a few weeks can make. As OPEC ministers prepare to meet here Monday, the question on their minds is not how high oil prices will rise, but how far they may drop.Crude oil prices have fallen more than $10 a barrel in the last month, driving down the retail price of gasoline and providing some relief for consumers. While energy prices remain high, they have not risen to the heights that many analysts had feared, in part because of a light hurricane season this summer, the cease-fire between Israel and Hezbollah, and the fact that the United Nations has not imposed sanctions on Iran.
While there is no sense of urgency about oil price increases, some members of OPEC are beginning to express anxiety about further price declines. Nigeria's representative, Edmund Daukoru, who currently holds the rotating presidency of the group, said Sunday, "I am very concerned about the drop in prices. We do not know how much further they can go and we need to review that in depth."
It must be nice to be in an industry where you can decide "I think my product is too cheap, I want to make more money, so I'm going to cut output to raise the price."
