Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.

As the world's largest crude exporter, the kingdom in the desert took its ball and went home.
As the Saudis left the building the message was shockingly clear. According to (http://www.nytimes.com/2008/09/11/business/worldbusiness/11oil.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1221131040-KOS/e6DE0gSZ3H0lkcDcLw) The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."
OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude as due to "over-supply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the US and EU for a time. That political battle is only at its beginning.
The downward pressure on oil got a second hand. Brazil has confirmed (http://www.marketwatch.com/news/story/another-big-oil-discovery-off/story.aspx?guid={847FA55E-0583-4A6D-931C-4A81820A742F}&dist=hplatest) another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. That breadth of that deposit has now expanded.
OPEC needs that Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member it forfeits its leverage.
OPEC has made no announcement to the effect that it is dissolving, but the process is already over

Couldn't happen to a nicer organization. Now maybe we'll see a real supply/demand situation, rather than inflated prices, the purpose of which is to squeeze the dollar out of the American public.

Couldn't happen to a nicer organization. Now maybe we'll see a real supply/demand situation, rather than inflated prices, the purpose of which is to squeeze the dollar out of the American public.

And of course Bush and McCain will take credit :)

And of course Bush and McCain will take credit :)
Well, if you want to get technical, it did happen on thier watch, so if they want to take credit, so be it.

Doesn't mean I'm gonna vote McCain into office because of it, though.

Hey Nekko :)

And hurray!

Bloody hell - this is big stuff.

Bush, both father and son, do deserve some credit here. I'm sure our ties to Saudi Arabia have had a huge part in this.

China of course makes a shit ton of products for the Saudi's as well, and they are a larger contributor to this than we are.

this is a good thing

I can't help but wonder if the date is a coincidence. After all, 7 years ago this evening we pulled a hell of a lot of Saudis out of colleges and cities across the country in secret FBI vans to CIA planes to get them out of the country - on an evening that air travel was forbidden.

I can't help but wonder if the date is a coincidence. After all, 7 years ago this evening we pulled a hell of a lot of Saudis out of colleges and cities across the country in secret FBI vans to CIA planes to get them out of the country - on an evening that air travel was forbidden.

Interesting point.

And probably has nothing to do with fact that biggest consumer they got is all talking about getting off oil? Love the move myself just hope we dont drop the ball on trying to get off oil (like we should of in the 70s), you know gas price drops and we all go nuts for another span of time without acting.

But dont buy its because they owe us. if that was case there were several times since Desert Storm I would think they would of done stuff to help us that they conviently passed on. I just think they going to protect their own money train.

And probably has nothing to do with fact that biggest consumer they got is all talking about getting off oil? Love the move myself just hope we dont drop the ball on trying to get off oil (like we should of in the 70s)

Hahaha..you hit the nail on the head! Also looking back to the '70s, what was that presidents name who foretold the future if we didn't get on the ball with energy saving and with alternatives?

I'm am totally ticked this isn't more in the news or at least none of the channels I'm visiting. feh.

Well oil did drop within a dime of $100 yesterday partly because of it.

True Chanzilla it isn't a reason to buy more oil ... but if you have to buy gas, don't get it from Citco (Venezuela) or other OPEC companies.

I can't think of one way to spin this.

huge win for Bush, he took a lot of heat for fostering and preserving that relationship.

Good Job.

For now....

Oil drops to 106 and gas prices barely drop. Have had a 23 cent increase here today and empty gas stations. Mostly from the people fleeing Ike and everyone filling up before the bog price spike hits.

It will take about 6 weeks to go down, as the oil bought at that price needs to be refined and processed and shipped.

The load of horse shit is how when the $100 barrel oil gas is in the ground, but it goes back up ... they change prices up right away and don't wait to bring them back up. That's where a large chunk of their profits this year came from.

Still paying 420 a gallon... And that's after our hot governor cut the state gas tax. Fucking Oil companies.

Still paying 420 a gallon... And that's after our hot governor cut the state gas tax. Fucking Oil companies.

Clearly they need tax cuts!

Yes because now they can use two $100 bills to light their cigars with...

As you know I'm an "oil" man when it comes to investing..... I have taken a beating from the super high barrel prices..... :)

I do not think oil will go to 200 bucks anymore and have been slowly selling off for 6 months.... won't get rid of it all but everything sucks right now in general....

time to just buy buy buy across the board.

It's time to buy solar, wind, and food (a little late on this, but not too late).

Archer Daniels Midland ......