OPEC cuts production, Venezuela lies, oil drops yet again

December 20, 2008

This is a repost of a post I made on Dec. 18th. For some reason, the file could not be seen in either Explorer and/or Safari (It could be seen in Firefox). I could not figure out the problem, so I am simply reposting it.

OPEC decided to cut oil production and as has been the case every time there
has been a decision to cut production; Venezuela has been among the
most hawkish countries calling for a 2 million barrel cut. The final decision was to cut 2.2 million barrels a day.

However, OPEC also issued its November report and while
Minister Ramirez maybe a hawk when it comes to calling for cuts, he is somewhat
sheepish when it comes to cutting Venezuela’s production as agreed.

Indeed, if
you check on page 35 of the November report, of the earlier 2 million cut in
October, OPEC members have only cut 739.7 thousand barrels, or 36.8 of the agreed
cut. However, Venezuela barely
cut 20,000 barrels a day, according to OPEC, which represents a scant 15.5% of
its quota to cut 129,000 barrels for the last cut.

So, do you
really believe Venezuela will
cut 189,000 barrels more a day this time around?

The market
certainly does not seem to think so, as the price of West Texas Intermediate closed downUS$ 3 per barrel at today.

Of course,
our own Minister Ramirez alias “Pinocchio” said he was satisfied with the
magnitude of the cut. Of course, let others endure it, let others cut, but the
robolution needs money.

You gotta
love the revolution.

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