If you need any amusement this holiday season aside from outdoor Christmas decorations gone mad, you’re welcome to review this week’s OPEC circus sponsored by corporate media. For the second time in nine months the Organization of Petroleum Exporting Countries got together and decided to cut production; this time by 500,000 barrels per day.
Funny Monkey Number One: The price of oil is dangerously low. Say what? OPEC decided to cut production by 1.2 million bpd back in October to, “halt a 10-week, 25 percent price decline.” Remember this graph?
Oil at anything other than about $20 a barrel is historically high. And yet they claim to be “stopping the price slide” or that they have “determination to manage the market and prop up prices.” I know we’ll never see $20 per barrel oil prices again. But I also know the real reason why. So how come the corporate media of our oil importing countries just sits there stupid and eats up this nonsense? Perhaps they actually buy this…
Funny Monkey Number Two: There are seasons of high demand for oil. In
Not So Funny Monkey Number Three: OPEC is peaking in oil production.
Now I ask you, if you were one of the countries that was responsible for the continuation of The Western World’s Great Big Fossil Fuel Party (admission by invite only) what would you do when you reached the peak of your production capacity? Would you come right out and say, “Sorry guys, the keg’s dry.” Or would you, in a market of sustained high oil prices, decide to voluntarily cut production? Think about it. What they’re doing would be like Starbucks saying, "Now that we have everyone addicted to $2 per cup caffeinated beverages we're going to be closing some stores." OPEC had this to say in a press release about the circus this week, “The Conference further reiterated the Organization’s determination to take all measures deemed necessary to keep market stability through the maintenance of supply and demand in balance, for the benefit of producers and consumers alike." Hello dummy media organizations, in case you really aren’t getting the hint OPEC is trying to tell you it has peaked. They're ready to give Richard Heinberg a call. Remember this is the same organization that once reported its oil reserves did this.
This group is interested in stability for as long as it can hold together a market for its product. But make no mistake, it is has never been interested in being forthcoming about the truth. And here sits the corporate media like three little monkeys.
So there you have it. To bad the truth isn’t as fun as a circus. Happy Holidays.
Some of the above charts from a responsible independent media resource, The Oil Drum.