Saudi Arabia pulls out of OPEC.

[Tornado]

After OPEC's announcement that they were going to essentially force crude prices back up after the price drops they have been having, Saudi Arabia pulled out of the organization.

Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.

As the world's largest crude exporter, the kingdom in the desert took its ball and went home.

As the Saudis left the building the message was shockingly clear. According to The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."

Linky.

I wonder if there is more to this than what it seems.

 

[ExigeEvan]

Well American will be doing a little dance in it pants.

But I can't help thinking that this will open up Saudi Arabia to a whole world of terrorist abuse.

 

[Kent]

I think anyone outside of OPEC will be dancing over this one!
I hope the Saudis not only stabilize the market through independent action but also directly oppose the artificial market conditions created by OPEC.
If this all works out, I'll give Saudi Arabia some real respect for the first time in a long time. 👍

 

[Duke]

Anything that busts Hugo Chavez's nuts is just fine with me. For the amount of gas we use in a year, I'd pay an extra 50 cents a gallon "Hugo Tax" if that money was applied toward having somebody make his life miserable on a regular basis.

 

[Formula1Driver]

It's about time somebody did something.

 

[Sureboss]

I think anyone outside of OPEC will be dancing over this one!
I hope the Saudis not only stabilize the market through independent action but also directly oppose the artificial market conditions created by OPEC.
If this all works out, I'll give Saudi Arabia some real respect for the first time in a long time. 👍

Well put.👍

 

[GT4 genius]

This is definitely true, is it? There seems to be nothing about this on BBC news or Sky or anything similar.
However it seems believable that Saudi Arabia dont want high prices of over $100 because it makes us try to find ways to wean ourselves off oil.

 

[Tornado]

This is definitely true, is it? There seems to be nothing about this on BBC news or Sky or anything similar.

Various major newspapers reported on Saudi Arabia refusing to cut production. I haven't been able to find anything else regarding whether they were pulling out of OPEC, however.

 

[GT4 genius]

Various major newspapers reported on Saudi Arabia refusing to cut production. I haven't been able to find anything else regarding whether they were pulling out of OPEC, however.

Same here, just their refusal, nothing about leaving the meeting.
Not giving out to Toronado, maybe GTPlanet is one of the first sites in the world to discuss this. Maybe the major media has left the meeting because they thought it was over when the production cut was announced.

 

[Solid Lifters]

This is definitely true, is it? There seems to be nothing about this on BBC news or Sky or anything similar.
However it seems believable that Saudi Arabia dont want high prices of over $100 because it makes us try to find ways to wean ourselves off oil.

True? Of sorts.

It seems this is no more than a pissing contest, at the moment. A lot of people blowing smoke up each other's ass, but it is interesting to see what unfolds.

To note, I couldn't care less if OPEC went in the dumps.

 

[Philly]

I read the latest BBC article (from Yesterday) and it did mention Indonesia suspending their membership to OPEC, but so far, nothing about Saudi Arabia.

 

[YSSMAN]

Well, the oil market is facing a pretty major collapse as demand has shifted downward dramatically in roughly six months... Add to that a dollar that has recovered (slightly, but not enough), it seems reasonable to see oil prices return to a $85-100 range, but that may be pie-in-the-sky depending on what happens in places like Nigeria, Sudan, Russia and (believe it or not) Canada. If in fact the Saudis left OPEC, it would not be the silver-bullet that kills the organization, but it would destabilize it just a bit. They're more than welcome to produce and charge whatever they wish for the commodity, however, I do not anticipate it lasting forever.

This will be an interesting story to keep track of...

RE: Venezuela

Despite the fact that Chavez can be a royal pain in the ass, he is a popular leader, and we have to live with him as long as his people continue to elect him to office. But, it is important to point out that we get more of our oil from Canada and Mexico than anyone else, Venezuela being fourth on the list as of 2006 (as I recall).

 

[a6m5]

I wonder if there is more to this than what it seems.

I would guess that United States is definitely in the mix. If not, they should be.

I wonder if there was a price tag for the Saudis to make this move......

 

[Sureboss]

Speaking of oil prices, shouldn't fuel have dropped more than it has? Oil has dropped by $40 a barrel, yet we've lost about 5-6p a litre only.

 

[ExigeEvan]

They claim that because they buy their fuel in batch contracts so they aren't neccesarily paying the current price for it.

But strangely the price tends to go up pretty quick at the pumps. Ah face it, they have us by the ballsack.

 

[YSSMAN]

Speaking of oil prices, shouldn't fuel have dropped more than it has? Oil has dropped by $40 a barrel, yet we've lost about 5-6p a litre only.

In theory, yes. But we're also in the middle of a hurricane season here in the US, and with the current storm (Ike) running down refinery central, I don't think we'll see prices fall to reflect the crude levels for a bit.

I was watching CNN or MSNBC this morning, one of their financial annalists said rather clearly that "if this weren't hurricane season, we'd see oil below $100 a barrel."

 

[Tornado]

Speaking of oil prices, shouldn't fuel have dropped more than it has? Oil has dropped by $40 a barrel, yet we've lost about 5-6p a litre only.

No. Crude prices went up way more percentage wise than fuel prices did.

 

[Venari]

There's very little they can complain about, but the Russians must be a bit annoyed about this. They've been happily flogging their oil to China at perhaps just below market rates for ages now, and now the other big player has decided it's time to break that market open a little, methinks. If the Americans don't have money to buy oil (hmm, and who owns their debt? Oh yes, China!) then the oil producing nations are going to go where the cash is. If OPEC were getting nervous about that, then more power to the Saudis. If they're beating the Western capitalists at their own game, fair enough.

This is going to change the face of international politics more deeply than you can possibly imagine.