Tuesday December 15, 2009

I'm Predicting:

On December 22nd OPEC ministers will once again meet.
This year the meeting will take place in Angola.

Assessing the comments OPEC oil ministers have made to date, it seems pretty certain that oil production will not change - there will be no scaling down and no new limits placed on oil production.

Iran very much wants to jack up the price of oil and is lobbying for a reduction of quotas - but OPEC oil ministers are not easily swayed.
Contrary to popular perception, the ministers in OPEC are extremely conservative and right now they are extremely happy with the price per barrel.
OPEC ministers do not like volatility in the market.
OPEC ministers do not plot the oil addiction of the West and they are not in charge of the price.

The bottom line is that OPEC knows they cannot play with supply and demand right now.
It could all boomerang and that boomerang would either cause a huge spike or huge drop in price - either way, they would suffer.

The West is addicted to oil and OPEC is the willing supplier.

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