jbg Posted October 4, 2016 Report Share Posted October 4, 2016 (edited) An OPEC Output Cut Not Likely to Alter Oil Imbalance By Nicole FriedmanOct. 2, 2016 2:08 p.m. ETOPEC’s move to cut output might be too late.After pumping full tilt for the past two years, the Organization of the Petroleum Exporting Countries is weighing a plan to reduce production by up to 700,000 barrels a day later this year. But many analysts say the proposed reduction isn’t big enough, nor will it happen quickly enough, to address a global supply glut that has kept oil prices low. The key point of that article was the issue of the "marginal supplier." Since shale oil and other non-OPEC oil now supplies the marginal demand (the demand for the next additional barrel of oil needed) what OPEC does is largely irrelevant. It is also inevitable that OPEC cannot really enforce any conceivable agreement. During the fall of 1973 the world was different. Oil production and refining were both operating at or over rated capacities. With prices being restrained by price controls in the U.S. demand was stimulated. How do we know that price controls were holding down the price at that point; there were, pre-embargo, spot shortages of gasoline and heating oil. Many pumps were priced at $0.411 per gallon rather than to the ".9" price, or $0.409. Thus, a very small production cut by OPEC unleashed chaos. Not so now; it would take an unimaginably large cut to have even a slight impact on prices, much less supplies. Edited October 4, 2016 by jbg Quote Link to comment Share on other sites More sharing options...
msj Posted October 4, 2016 Report Share Posted October 4, 2016 Yep, I have several clients getting the call to get back to butt hump Alberta/BC and get back to work. And these are the guys who live on Vancouver Island. Quote Link to comment Share on other sites More sharing options...
Boges Posted October 4, 2016 Report Share Posted October 4, 2016 Which is why, at the moment, carbon pricing is rather useless to try an reduce emissions. All it proves to do is to pad governments pockets. Quote Link to comment Share on other sites More sharing options...
msj Posted October 4, 2016 Report Share Posted October 4, 2016 If they do it like BC then no one is going to care except for the far right who are too small to elect anyone in this country. Quote Link to comment Share on other sites More sharing options...
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