Friday, June 15, 2012
What happens to crude oil prices after the OPEC meeting?
July WTI crude oil opened this morning at $83.91 a barrel with ICE Brent crude oil down 53 cents to $97.28 a barrel. The bearish mood for the prices of crude oil has not yet set in after the just concluded OPEC meeting held in Vienna on Thursday, June 14, 2012. In the official meeting members decided not to change export crude oil quotas from the current 30 million barrels per day. However, before the official meeting Iranian Oil Minister Rostam Ghazemi dropped a verbal bomb aimed at the Saudis warning them not to use oil as a weapon against it by pumping more oil to countries no longer buying Iranian crude due to the economic sanctions being imposed. Those sanctions will kick in on July 1, 2012 when the Western European nations will cut off any of their Iranian oil shipments. Minister Ghazemi went farther by warning the US and Europe their tactics will have a reverse effect. Saudi Arabia will not necessarily be able to ruling the OPEC crude oil pricing roost with Venezuela now exceeding their oil reserves per an internal BP report: http://oilprice.com/Latest-Energy-News/World-News/BP-Announces-that-Venezuela-Now-Have-the-Largest-Oil-Reserves-in-the-World.html However, Hugo Chavez is having severe health problems and may not be able to continue to control Venezuela with his social dictatorship very much longer. The new production being explored in US shale oil formations in Colorado, Montana, North Dakota and Montana will give it the US the ability to cut crude oil imports from OPEC countries thereby taking away any price control they have had in the past 50 years.