“OPEC’s mission is to coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.”
Stated goals of OPEC as I have heard further discussed by OPEC reps. on C-SPANN as well lead me again to the conclusion that again…we DONOT need dramatic reduction of oil consumption, just marginally. I will even go so far as to say…if we DONOT INCREASE demand, we can stabilize and drive down oil prices .
…and 55 mph national speed limit would do the trick; and carbon up that Vette, save lives, tires, maintenance cost, roadways, -pollution etc. A no brainer.
“Mercedes will push their Smart Cars to off-set the consumption of their regular car line; also, the B series will be introduced in North America, since it is also a small engined vehicle.”
We’ll have to wait and see how well the smart catches on. Did you hear they were planing on selling the b-class? I don’t foresee benz selling anything below the c-class in the U.S. for marketing reasons, they would probably just try to sell more diesels (even the e-class CDI diesel will meet 35 mpg). It would be interesting if the started selling the c-class diesel in the U.S. AFAIK, they don’t have plans to sell the diesel smart here either.
“Stated goals of OPEC as I have heard further discussed by OPEC reps. on C-SPANN as well lead me again to the conclusion that again…we DONOT need dramatic reduction of oil consumption, just marginally. I will even go so far as to say…if we DONOT INCREASE demand, we can stabilize and drive down oil prices.”
I have also heard OPEC quoted as saying they consider $90US the minimum acceptable price. There current problem is that they are being paid with devalued dollars so they are not seeing the full price for their product. A couple of weeks ago, their representatives suggested the U.S. fix their economy before asking for increased production. The last thing they want to do is sell more oil for less valuable dollars, would you take that deal?.
So, I think you are partially correct, OPEC wants dollars and they are concerned that the dollars remain stable. They are not going to do anything that damages the U.S. economy enough the hurt the dollar significantly (killing the golden goose), but will certainly tweak the U.S. for a while until the currency gets under control. When the dollar is stable, oil prices will probably be stable, but they won’t be significantly lower. The U.S. hasn’t figured out that they are not driving this bus.
Craig, I hear the Smart Car is selling very well in Canada as a city car. Not sure how good it is in snow. I had read that Mercedes will introduce the B Series in Canada first; it is a good test market.
Daimler Benz paid $40 million in fines for 2006 alone for not meeting the old CAFE standards. They obviously have to put more diesels on the road and/or sell more small cars.
"Craig, I hear the Smart Car is selling very well in Canada as a city car. Not sure how good it is in snow. I had read that Mercedes will introduce the B Series in Canada first; it is a good test market.
Daimler Benz paid $40 million in fines for 2006 alone for not meeting the old CAFE standards. They obviously have to put more diesels on the road and/or sell more small cars."
Interesting, I hadn’t heard about the b-class in canada, that may be a marketing mistake in the U.S., but we’ll have to wait and see what happens (I’m not sure selling the c-class in the U.S. was a very good idea either). I would like to see the smart car catch on in the U.S., it’s a cool concept.
They seem to be trying pretty hard to sell diesels, their is a very small price difference between gasoline and diesel models. It will be interesting to see if they can sell enough to reduce the fleet average. Either that or they will just decide to eat the fines again.
I don’t really think anybody s driving the bus. Whereas in the 1970s OPEC jacked up the price of oil from $3.50 or so to $11.00 overnight, the present price levels are driven by costs, but most the futures markets; speculation (NY Mercantile Exchange, etc.)and rapidly rising demand. OPEC no longer sets or controls the price of oil. They just try to fine-tune the supply.
Should massive quantities of cheap oil be discovred by non-OPEC countries, OPEC would be powerless to keep oil prices from sliding. Not that this is remotely likely. All members need all the revenue they can get their hands on. They also cheat like crazy, and often exceed their quotas.
Agreed that a very rapid rise may cause a recession, which is bad for everyone, OPEC basically wants to use whatever spare capacity they have (not much these days) to put enough oil on the market to keep the supply in balance with demand. A couple of years age, OPEC would have been very happy with a steady $60/barrel oil price. Now hey want more because of the erosion of the dollar and the inherent strength of the market.
The decline in the value of the US dollar, as mentioned, also influences oil prices. That is caused by a number of factors, and the recent real estate meltdown is the latest factor. In the future, oil will likely be priced by a blended basket of currencies; Euros, British Pounds, US Dollars, and Japanes Yen. When that happens, the oil price to US customers will increase rapidly.
Stabilize consumption; not likely. You can’t ask China and India to stop their rapid growth. Our reductions will be less than their increases. Affecting the price; equally unlikely. As long as the long term outlook is for growth with gradually decreasing supply, $150 oil is much more lkely than $75 oil.
I agree that if we had a major worldwide recession, oil prices could temporarily drop to $75, like Macy’s being overstocked with merchandise after a slow Christmas season.
Since alternate fuels can only supply a small amount, and their cost is much higher than petroleum fuels, don’t count on them either to reduce prices.
I strongly recommend a book called “The Last Oil Shock”, by David Strahan, to all of you. This is a hard-nosed, well researched book and will get you mentally ready for the future. Hubbard accurately forcast Peak Oil for the US years age. This book treats the subject on a global basis. You can’t tell an Indian or Chinese family who have never owned a car before, but can now afford one, that they should not have one! And we are taking about several hundred million families. China will soon surpass the US as the world’s largest car market.
It is unlikely that all who served agree agree with you, Norm. But then, opinions are like, well, you know.
An open minded and objective consideration of all that we enjoy in this country and what brought us to this “best of all possible worlds” might be enlightening.
“I strongly recommend a book called “The Last Oil Shock”, by David Strahan, to all of you. This is a hard-nosed, well researched book and will get you mentally ready for the”
Not having read the book, I’m sure that somewhere it discussed the stated reserves that oil producers declare yearly to keep annual output as a % of those reserves. Saudi Arabia had verfied reserves years ago that are restated every year to keep thier production constant. They’re not making anymore oil underground…the international community is always suspect of OPEC because of such practices. We really don’t know what there long term capacity is; reason number 12 to be energy independent.
“I don’t seem to recall many folks driving anywhere near 55 mph the last time that was tried, but the sales of radar detectors did go way up.”
Many, myself included, drive 5 to 10 mph over the limit. I was driving 60+ when it was 55 instead of 70 now when it’s 65. I still remember we drove much slower. 55, not, but significantly less so as to make the “venture” worthwhile. It means that relief breaks have to be better planned. I do remember many more over 50 crowd taking up breakdown lane parking space.
The issue of the book is not so much how much oil there actually is left; the problem is the rate at which oil reserves are discovered and develpoed falls much short of today’s consumption. So the warehouse is not being replenished fast enough. Why? In the last series of posts on this subject I raised the sad fact that 75% of all potenial and real oil reserves are in the hands of state oil companies, many of which are less than brilliant in developing new reserves, or they don’t have the cash to do it. Mexico, Venezuela, Russia, Nigeria, and many others could produce more if Western firms were allowed to develop the oil and gas reserves.
OPEC members usually are not truthful about the size of their reserves; Saudi Arabia always tells the press they have lots of oil ready to go. Large International Oil Companies have often “mis-stated” their reserves in order to keep investor confidence high.
So, at present, US and European oil companies have lots of cash but not enough places to drill for oil. As a result, many are buying back their own shares, whereas they should be developing and replacing reserves.
There is lots of oil left; Canada has reserves almost equal to Saudi Arabia, but mostly in difficult to produce oilsands, requiring a lot of water and energy. Venezuela has enormous very heavy oil reserves as well. These are equally difficult to put into production. Chavez has difficulty in even keeping his existing fields producing; under his “leadership” Venezuela’s oil production has gone from over 3 million barrelas per day to just over 2 million. This is the root of the problem.
The $100+ oil price makes all these difficult deposits economic, but there is a time lag in bringing these online, and foreign firms are often excluded from even participating in these oil plays.
Canada’s oilsands, on the other hand have local and foreign investment, includin several US firms, and production will reach about 4 million barrels per day by 2012, a 300%increase.
“Why? In the last series of posts on this subject I raised the sad fact that 75% of all potenial and real oil reserves are in the hands of state oil companies, many of which are less than brilliant in developing new reserves, or they don’t have the cash to do it. Mexico, Venezuela, Russia, Nigeria, and many others could produce more if Western firms were allowed to develop the oil and gas reserves.”
And we thought govt. incompetence had no value…state run oil companies may be the final solution to saving the planet…I speak not in jest.
We do have a gas guzzler tax in the US. The Honda S2000 is even on the list! It’ll cost you $1300 to own that gas-swilling monster! Unfortunately, the real gas hogs aren’t on the list. It only applies to cars.
I think we all should write our elected representatives in DC and request a guzzler tax that is equitable; one that includes all SUVs and pickups that cost more than $40,000. I’m unwilling to tax work trucks most likely used by tradespeople and the usual list of trucks so large that they are large enough to be obviously commercial. I prefer to get the folks spending their discretionary income on the big brutes. Like the guy a block away from me who owns an electrical contracting company - and a Yukon, and an Escalade, and a Benz SL and an E420. Tax that boy all the way to Memphis. And back. The same rate as cars is fine with me. Anyone with me?
Craig; I just learned that the B Class MB sells for $29,900 for the standard, and $33,900 for the Turbo model in Canada. The standard engine has a 5 speed manual and the Turbo 6 a speed. A CVT is optional. This car would meet all North American safety and emission standards, so it could easiy be introdcued into the US market.
Canada has a large Asian population who have a strong preference for Mercedes cars, and it should sell well.
“Craig; I just learned that the B Class MB sells for $29,900 for the standard, and $33,900 for the Turbo model in Canada. The standard engine has a 5 speed manual and the Turbo 6 a speed. A CVT is optional. This car would meet all North American safety and emission standards, so it could easiy be introdcued into the US market.”
Thanks for the info, I’m sure they could sell a b-class here, I just don’t know if they would want to. They typically avoid selling down-market cars in the U.S. because it’s not consistent with their marketing strategy. I’m a little surprised that they chose to sell the c-class here (about $40K, I think), I guess they need the sales volume and it does help their fleet mpg. It will be interesting to see what they do over the next 5-10 years.
Twinturbo said “There’s nothing new about your suggestion. It’s been touted about a number of times before. Just putting a dress on a pig IMO. Another veiled attempt at a socialist program designed to redistribute wealth without earning it.”
All corporations do is redistribute wealth to the CEO and stockholders without working for it.
“Many, myself included, drive 5 to 10 mph over the limit.”
I drive the speed limit and get 28.5 MPG on my commute in an Accord V6. I’m sure that if I drove faster that I would get poorer gas mileage. I tested this in an Impala on a business trip. I drove about 50 miles one way at 60 and the other direction at 70 MPH (speed limit). The car measures average fuel usage. I got 32 MPG at 60 MPH and 28 MPG at 70 MPH. I’ll bet that just about any car would show a similar improvement at slower speeds.
There’s plenty of oil in shale in the Rockies. One day it will be economical to produce gasoline from oil shale. I’m sure that Canada has lots of oil shale too if Wyoming does.