Oil soars 6 percent as OPEC reaches deal to limit output in November
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Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#2Possible corollary: "Tesla stock rises in response."
We may be heading towards a world of permanently low oil prices, as rising prices will cause more people to switch to electrics or plug-in hybrids.
Car buyers exhibit amazingly lemming-like behavior, switching to more fuel-efficient cars as prices rise and switching away from those fuel-efficient cars as prices fall. That process is likely to become more pronounced as electrics become more available and affordable.
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#3I wonder if this will be like the Atlantic City Conference. See how long this lasts before someone breaks the peace.
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#4They can't win because there are too many non-OPEC producers now. When the prices rise, the non-OPEC producers will sell into it.
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#5The game theory on this is awesome.
You've got OPEC a collection of countries that don't all like each other, trying to agree to lower their individual production knowing that they can't trust each other.
At the same time this exact group of countries are running deficits and any cut's they make will increase those deficits in the short term. Keep in mind these are countries who can't be described as stable. In many the only thing keeping the government in power is they oil money they sprinkle on their populations.
You've got oil producing countries outside of OPEC who would love to see the price of oil rise so they can expand their production of oil that's more expensive to produce. Keep in mind there is a prominent theory that OPEC flooded the market with cheap oil to drive these countries out of the oil producing business.
You've got world economies that depend on oil, all of which are using cheap oil to prop themselves up to differing degrees. A return to $100/barrel oil would be short term trouble for many 1st world economies.
I love the oil market. I can't figure it out, but I love trying:)
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#6[deleted]
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#7The game theory on this is awesome. You've got OPEC a collection of countries that don't all like each other, trying to agree to lower their individual production knowing that they can't trust each other. At the same time this exact group of countries are running deficits and any cut's they make will increase those deficits in the short term. Keep in mind these are countries who can't be described as stable. In many…
all this in mind, it takes a lot of thought to imagine a world not reliant on oil
imagine all the countries that won't have oil money
that has so many implications
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#8Possible corollary: "Tesla stock rises in response." We may be heading towards a world of permanently low oil prices, as rising prices will cause more people to switch to electrics or plug-in hybrids. Car buyers exhibit amazingly lemming-like behavior, switching to more fuel-efficient cars as prices rise and switching away from those fuel-efficient cars as prices fall. That process is likely to become more pronounced…
What kinds of car people use is irrelevant as long as the power grid is predominantly powered by fossil fuels. The number to watch is percentage of "green" power generation, which changes far too slowly to respond to market lurches like this.
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#9Possible corollary: "Tesla stock rises in response." We may be heading towards a world of permanently low oil prices, as rising prices will cause more people to switch to electrics or plug-in hybrids. Car buyers exhibit amazingly lemming-like behavior, switching to more fuel-efficient cars as prices rise and switching away from those fuel-efficient cars as prices fall. That process is likely to become more pronounced…
What kinds of car people use is irrelevant as long as the power grid is predominantly powered by fossil fuels. The number to watch is percentage of "green" power generation, which changes far too slowly to respond to market lurches like this.
Oil is not a big part of electricity generation in most places.
Re: Oil soars 6 percent as OPEC reaches deal to limit output in November
#10The game theory on this is awesome. You've got OPEC a collection of countries that don't all like each other, trying to agree to lower their individual production knowing that they can't trust each other. At the same time this exact group of countries are running deficits and any cut's they make will increase those deficits in the short term. Keep in mind these are countries who can't be described as stable. In many…
> "...love to see the price of oil rise so they can expand their production of oil that's more expensive to produce"
Yeah, it's a weird dynamic. For example, the higher the price of oil, the less dependent the US is on the rest of the world. Lots of oil in that $60-$80+ range in and around the US.