Quote from article. "With so many indicators pointing to the pain of high oil prices and the detrimental effect they are having on family budgets and economic recovery, Opec's decision simply deepens the gloom," he added. The four west-leaning Gulf Arab states had proposed increasing daily output to more than 30m barrels but they were outvoted by seven countries including Venezuela and Algeria who wanted them left unchanged. Saudi Arabia made clear it was not happy. Ali al-Naimi, oil minister for a country which has close ties with America and Britain, said: "We were unable to reach an agreement this is one of the worst meetings we have ever had." Market analysts said there were genuine differences inside Opec about whether the bout of very high oil prices could last and undermine the global economy or naturally fall back. "One factor is a diverging market view. Another is politics," said analyst Samuel Ciszuk at IHS global Insight. "At times of heated politics and ideological debate, Saudi struggled to dominate as much as it could have given its size vis-a-vis others in Opec." The atmosphere had been poisoned by Qatar backing Libyan rebels fighting the government of Muammar Gaddafi, while Saudi Arabia has angered Shi'ite Iran by using force to help the Sunni-led Bahrain suppress a Shi'ite rebellion. But, this time, those in Opec politically opposed to the United States led by Iran and Venezuela found enough support to block Saudi Arabia whose views normally hold sway. Katherine Spector at CIBC World Markets said: "Saudi is the cartel member most interested in earning political 'points' with consuming countries, and maintaining its image as a reliable supplier of last resort." But several Opec members also argued they needed to keep tax revenues high to protect their citizens against the rocketing cost of other commodities such as food, and could not to let the oil price decline. Opec is not due to meet again for another three months and some analysts said the angry divergence of views could mark the beginning of the end for the cartel. http://www.guardian.co.uk/business/...ises-after-opec-meeting-collapses-in-disarray
One has to accept their standpoint. Their neighbours are falling into regime change as a result of escalating commodity prices (not from political/religious unrest which has been boiling for decades). They have to keep their peons happy. The US is devaluing the petrodollar which means they always end up getting ripped off. The high price of oil has once again been driven up by speculators... there's been no 'real' increase in demand. The last time the speculators were allowed to run riot (2008), production was ramped up to meet false demand and when the hoarded oil was dumped the price crashed and producers were screwed. This time they (OPEC) are not letting the speculators send false signals to the market.
OPEC countries all cheated with production levels before, so these OPEC meetings never had real consequences, but now they hate each other even before they sit down together to make policy. :lol:
What a perfect way to make up for all the inflation the US is causing. It is their only tool to combat it in their countries and it is the right thing to do.
Playing both sides, a stratagem which the Saudis historically favor. Then again, OPEC would hardly want to kill the 'golden goose' (pardon the expression) by giving their customers incentives to aggressively pursue alternative energy resources. On the other hand, there are real domestic concerns for their own regimes and balance of payments.
The US and the petrodollar is now really between a rock and a hard place. As the price of oil goes up in line with inflation the only way the US can stop the climb is to raise interest rates (now at as near to zero as you can get to keep the fragile economy going). But if they raise interest rates, the whole economy will suffer crash, Yet if oil prices keep climbing, the economy will crash. have I got this right?
