OPEC plans production cuts
OPEC is meeting in Algeria today, and OPEC and non-OPEC countries alike said they'd try to cut production to try to boost oil prices. But John Dimsdale reports Americans might not notice much difference.
Algerian President Abdelaziz Bouteflika (center) greets the crowd during a welcoming ceremony in Oran, Algeria prior to an OPEC meeting -- December 16, 2008 (Fayez Nureldine/AFP/Getty Images)
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Scott Jagow: OPEC is meeting in Algeria today. Saudi Arabia has already said the cartel will yank 2 million barrels off the market to try to prop up the price. Plus, Russia and other non-OPEC countries have said they will cut production. But oil traders are just kind of shrugging it off. Here's John Dimsdale.
John Dimsdale: The International Energy Agency predicts world demand for oil will fall this year for the first time since 1983. Even China is using less oil. And with surpluses piling up, oil prices are dropping.
Joseph Stanislaw: OPEC knows there's a challenge before them.
Joseph Stanislaw is an oil analyst for Deloitte. He says despite calls for bigger cuts from some members, OPEC can successfully engineer a 2 [percent] to 2.5 percent cut in production over the next few months. But he doesn't think Americans will notice much difference.
Stanislaw: It's not going to rocket the price back up to $100 a barrel. It may help stabilize it, or settle it in some range between $50 and $60 per barrel. That will do no damage to the U.S. economy.
He says that'll be a "comfortable" level for American businesses and consumers, who'll be paying $1.60 to $2 a gallon at the gas pump for most of 2009.
In Washington, I'm John Dimsdale for Marketplace.
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From Southgate, MI, 12/24/2008
It was Greed! Greed! Greed! Pure and simple by OPEC and speculators that ushered in the coming "Great World Wide Depression".
When gasoline went to over four dollars a gallon, that was the straw that broke the "camel's back", appropriately enough. It was they who started the ball rolling, and now it cannot be brought to a halt, regardless of how much fiat "money" is printed! First, it was large vehicles that stopped selling, followed by the mid-sized automobiles. Many Auto workers were layed off, along with others in related industries, as a result, high ticket items such as homes, washers, dryers stopped selling and so on down the line to the junk in the "Dollar Stores".
The Southern States claiming to manufacture automobiles such as Toyoto, Honda, and Subaru etcetera, feel that they will not be touched. They are living in a dream world, the foreign vehicles are not made in those States, they are simply assembled there; all of the parts are made in Japan and shipped to the Southern States in kit form.
The United States Industrial base has virtually been removed. If the U.S. Auto Manufactures go under, it will be the end...the coupe de grace, it will be World wide chaos. About the only ones not to suffer, will be the Amish of Indiana, Pennsylvania, and Ohio, living untouched by time on their 18th Century farms.
From Eufaula, OK, 12/19/2008
People can't afford it. The reserves of oil are full and the demand for products are down. Almost everyone took a big hit from the WAR. I think it will take years to get back to where we were. People are going to need gardeners again. The money moves the oil moves.
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