New oil is coming from almost everywhere, a mix of big and small, OPEC and non-OPEC.
That's because non-OPEC producers pumped more valuable light crude to counteract the effects of OPEC's cheating.
"The market doesn't distinguish between an OPEC and a non-OPEC producer, " he says.
We saw the noble intentions behind the formation of OPEC yesterday and now what OPEC is a clear reflection.
Outside of Opec, of which Russia is not a member, the country is the No. 2 after Canada of non-Opec oil producers.
As new production comes online from OPEC and non-OPEC nations alike, the Saudis will likely need to trim back again, to 8.5 million.
In other words, because OPEC controls the price of crude oil, all we need to do is tell OPEC to reduce oil prices and Ta-Da!
FORBES: Dumbest Guy in the Room: Donald Trump's Energy Policy
Last week an Opec source said leading producer Saudi Arabia was considering a move that would require Opec to add as much as one million bpd of extra oil.
This global tax cartel will be akin to an OPEC for politicians, and the impact on taxpayers will be quite similar to the impact of the real OPEC on motorists.
But Opec hawks Iran, Libya, and Algeria warned in a statement that market stability is a responsibility of non-Opec as well as Opec producers, implying they might oppose the production increases.
The tepid supply forecasts for non-OPEC oil producers in 2013 are not strong enough to represent any break in the fundamentals that would be unmanageable for OPEC to chip in and cover.
If anything the flat price of crude could be influenced more by political implosion across producer states from correcting prices, rather than any meaningful cooperation between OPEC (Saudi) and non-OPEC (Russian) heavyweights.
What Moscow will do if things get tough, is maintain its observer status with OPEC, all while pushing bilateral deals outside OPEC forums with the likes of Nigeria, Iran, Venezuela, Ecuador and Algeria.
Having the most excess capacity, Good tells Forbes if any OPEC country were to cut production, it would be Saudi Arabia and since they refused, OPEC had to keep levels where they were.
It is still higher than the oil-consuming countries would like, although the price is now within the range preferred by the Organisation of Petroleum Exporting Countries (OPEC), and OPEC members are already muttering about production cuts to prevent further falls.
The president of OPEC, Abdullah bin Hamad al-Attiyah, told the Wall Street Journal that the cartel would not cut production below 24m bpd unless big oil exporters outside OPEC, including Mexico and Norway as well as Russia, were prepared to cut production too.
And that Russia may be trying to sort of needle the west a bit by looking as though it's cozying up to OPEC, when in fact Russia has its own agenda and has not necessarily worked together with OPEC, the same on this issue.
The incentive to cheat grew even stronger as non-OPEC suppliers, especially Russia, grew in importance. (Russia's output has increased by 2m bpd every year for the past three years.) OPEC's current production of around 30m bpd (including Iraq) is well above its official quota of 26m bpd.
Ali Rodriguez Araque, OPEC's secretary-general, has pointed out that the change in price is not the result of any change in the balance of supply and demand for oil, and he also said that OPEC has no intention of manipulating the price or supply of oil for political reasons.
Commodity prices, a barometer of excessive money creation, are depressed, except for OPEC-manipulated oil.
The US, in particular, has been trying to apply pressure to Opec to modify any output cuts.
World output inched up to 86 million bpd a year ago only by dint of spigot-opening by OPEC.
In fact, it's about five percent of daily output of all the OPEC producing countries.
And in fact, there has been a lot of cooperation recently between OPEC and Russia.
And bear in mind that the OPEC countries produce about 40 percent of global oil.
Other Investor Team members agreed that recent OPEC cuts weren't enough to combat the lousy economy.
They had and have an incentive to lie, to support a larger OPEC quota.
FORBES: Saudi's Have Reduced Production, But Don't Believe It's Because of Reduced Demand
Inventories, which were temporarily in surplus, have tightened due to an OPEC production cutback.
Persuading all OPEC nations to go along would establish a floor under oil prices.
应用推荐