business

Putin, Iran's Rouhani back OPEC bid to stabilise oil prices

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© 2016 AFP

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Better go fill up now...or get solar panels all up in my car. Why can't wind power cars. There's plenty of it, especially when driving. Battery power til cruising speed then use wind power.

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but the efforts to reach a deal have been undermined by rivalries between Iran and Saudi Arabia

but the efforts to reach a deal have been undermined by Petrodollar States Saudi Arabia and the US as it would seriously hinder their economic war against Russia and proxy war in Syria.

There, fixed it for ya Agence France-Presse

-1 ( +1 / -2 )

"Stabilise oil prices" = put them through the roof again

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""Battery power til cruising speed then use wind power"

yeah. And the faster you go, the more wind there is!

If you look around at non-fake news on the internet, you find that about half of the services are saying prices will go up, and half say that prices will go down. Half of them emphasize Putin and Iran's commitment and half see a total lack of commitment. Go ahead. Look. It is amazing. The talks were a success? A failure? Who knows. It is all spin.

But if you can do math and if you have been paying attention, and if you have studied cartel theory, which is actually taught in Japanese public high schools (I was floored when I found this out recently!), then you can figure out who is right.

Here is the deal. Putin and Iran have committed to nothing. They are pumping as much as they can, and they are trying to pump more. It is right there in the text of the article. Now HOW is OPEC going to get its members to cut production if Russia says "you cut first. Then we will. " and Iran says, "we are not cutting, but you go ahead"? It ain't happening. Someday, when Venezuela craters entirely (OPEC) and Russian capacity starts to falter, then there might be a small window for everyone to agree on something, but don't hold your breath.

We will have higher oil prices someday, but barring some weird catastrophe, we are going to be in the 40 to 55 range for at least the next year or two. I will go out on a limb and say., probabilistically speaking, until Dec. 2017 maybe Dec. 2018. Even if an agreement is reached, there is so much supply and capacity that rapid price changes will not come soon.

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I agree with 5SpeedRacer5. If I were to add any thing, it would be peak demand, with various alternatives coming into the market demand will diminish so there will be more supply than demand forcing to lower prices to keep it attractive to the ones that had not move to alternatives.

This is the start of end of the carbon society.

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