Matt and the other guy

OPEC Won’t Cut Prices

IHT 08 ( International Herald Tribune March 2 2008 OPEC rethinking production cut plans)

In Washington, Samuel Bodman, the energy secretary, said he personally believed that an
increase in OPEC production could help bring prices down.

"The price that we are now seeing would indicate a certain fear level on the part of the
marketplace," Bodman told reporters Thursday. "It is important that the members of OPEC for
their own sake carefully look at supply and demand."

His concerns were echoed by some members of the cartel, who sent signals that they recognized
the threat of an economic slowdown.

"I expect OPEC to leave output unchanged," Shokri Ghanem, Libya's top oil official, told Dow
Jones Newswires Thursday. "At this point, there is no reason to do anything."

Venezuela's oil minister, Rafael Ramirez, said he would back either a cut in output or a decision
to leave production unchanged.

Since the price collapse of the late 1990s, OPEC has proved very effective in fine-tuning its
supplies to micromanage the market.

OPEC will cut prices

IHT 08 ( International Herald Tribune March 2 2008 OPEC rethinking production cut plans)

The last time OPEC increased its output, which was in September, the decision to increase output
by 500,000 barrels a day had little impact on markets. Oil futures have jumped by more than 30
percent since then.

But more recently, some analysts point out that Saudi Arabia, the world's biggest oil exporter, has
allowed more oil to seep into the global system. Analysts believe the Saudis would like to see the
level of oil stocks loosening in coming months.

According to estimates compiled by Bloomberg News, Saudi Arabia pumped 9.2 million barrels
in January, 250,000 barrels a day more than its allocated share under OPEC quotas.

"It might seem counterintuitive, but OPEC should be increasing its production now that prices
are dropping," said Antoine Halff, the head of commodities research at Newedge, a brokerage
firm. "This would provide a lifeline to the world economy. OPEC knows it can't afford a
recession."

Tricked by circumstances.
 Matt and the other guy

Less Demand will Drive lower OPEC Prices

Taite 08 (Carrie Staff Writer Financial Post April 14, 2008 Only recession will spur Opec oil
surge, experts say) Recessions put the brakes on consumer spending, which is particularly bad news for China because it manufactures
many of the goods consumed in the Western world. Much of China's growth is based on its export industries, and if these businesses stagnate, or
A drop in oil
even decline, investment in that sector of its economy could stall and "the growth in Chinese oil demand ends," Mr. Lee said.
demand from China, the world's second-largest oil consumer behind the United States, would translate into less money into
OPEC members' government coffers. To make up for the shortfall, OPEC would produce and sell
even more oil at reduced prices to maintain demand and ensure it pocketed they same amount of
money as when prices were high, Mr. Lee predicts. "I don't believe that [OPEC's production] is driven
by high prices," Mr. Lee said. "I believe that is driven by low prices, particularly if that low price
starts to effect an increase in demand again."

High Prices Lower demand

Taite 08 (Carrie Staff Writer Financial Post April 14, 2008 Only recession will spur Opec oil
surge, experts say) High oil prices prompt some Western states to temper, or search for ways to temper,
oil consumption, but another expert at the CERI conference noted that oil use actually rises in the Middle
East as prices climb. Higher oil prices mean Middle East governments have more money to support and
invest in their countries, which leads to higher energy consumption in the region, noted Kang Wu, senior
fellow, East-West Center and senior director, FACTS Global Energy USA.

Alternative Energy would lower OPEC prices

Linhardt 08(Hans Member of the Natural Resources Council Oil and gas price increases
should accelerate US energy developments) Oil prices will not decrease until The dollar
strengthens due to sound and disciplined economics in the US and other countries OPEC is
forced to lower the oil price due to serious and accelerated alternative energy developments in
the US such as nuclear power and clean coal CTL, SNG and IGCC In summary the increased oil
and gas prices are a blessing in disguise to force the hand of Congress to stabilize the dollar and
heavily invest in national oil and gas projects and forget about misconceived tax increases for the
oil and gas industry

Tricked by circumstances.
 Matt and the other guy

High Oil hurting Econ now

Reuters Jul 10, 2008 High oil and U.S. floods may accelerate food inflation

Crude oil has eased in recent days but remained near a recent historic high of around $145 a barrel and
remained up more than 40 percent from the beginning of the year. U.S. food inflation is running at more than double
the normal rate this year and economists are poised to upwardly revise their food inflation outlooks, especially if oil prices fail to drop further
"I am very concerned over the impact of that continued increases in energy prices
from historic peaks.
are having across the board," said John Urbanchuk, an economist with expert services firm LECG. "All of these
commodities and all of the food products travel by truck and the price of diesel fuel continues to skyrocket and that's probably going to do more
"Until we see a sustained break in petroleum prices
to raise food prices than increases in basic commodities," he said.
that provides serious relief, it's going to be a problem for inflation in the United States,"
Urbanchuk said.

Tricked by circumstances.