gas prices falling down to $1.15 a gallon for 87

[Nikuk]

@neurokinetik

Hmm, OPEC controls the majority of the supply, so with demand being a relatively known amount, I’d say they can control the prices. Any time they think the price is getting too low they cut production. :gotme:

not really, no. If oil prices are too high (60-65+), it then becomes seriously advantagous for other companies to dump capital in research & discovery. This is NOT what OPEC wants. It means more competition for OPEC.

Think of it this way, if everyone is happy with $50/barrell oil & OPEC is making fat profits because the american oil industry is willing to stuff the till with easy money… then OPEC is happy.

If no one (Big Oil, US Gov’t, to a lesser extent: Consumers) is happy with $70/barrell oil, then the american oil industry will slowly start spending more on alternatives. That may be hydro/battery/solar energy. It may just as easily be tapping new oil pockets that would be independant of OPEC. It could also mean going to Russian oil sources for just a few bucks less. But in any case, OPEC will be making a fat profit on $70/barrel oil but will start losing market share.

Sound a bit like GM & Ford?

-edit-

@JayS

People don’t want to believe that OPEC does not want the price of oil this high, but it’s true. With oil this high just this sort of thing will continue happening because the return on investment is there for serious oil exploration.

Look at it from OPEC’s perspective. You have a vast supply of oil, already found, and there is a huge demand for it. You know that at $50/barrel you’re making a killing. You also know that at $50 a barrel it’s harder for your competitors to search for oil in new places, therefor keeping your supply in greater demand. At $70 a barrel though, even though you’re making an insane profit in the shorter term, you’re also forcing more oil to be found and put on the market, thereby lowering your market share and hurting your long term profit.

The 3-15 million barrels is just a drop in the bucket, but that is just a start. The fact is this is a first of its kind operation, and will only result in more exploration and finds in similar areas.

To sum it up:
:tup: to capitalism. If you give someone a way to make a profit, they’ll do it.