Whats an oil cartel to do?
Why, cut production of course! Sounds like such a good idea that several countries are doing it already, but there is danger there as well. It seems that admitting they have spare capacity may be the fastest way to lower prices. As you can see from the above chart, the last time OPEC had more than 3M barrels of spare capacity, oil was $30. And cutting back a million barrels is like a big neon sign saying there is plenty to spare — so much so that it just isn’t worth selling! Speaking of spare capacity — I said it way back in early August that we were facing a forced shutdown in the natural gas market and it’s already hit England where gas prices fell to -.04 pence (about NEGATIVE 7 CENTS) as the grid backed up and wholesalers were begging storage facilities to take it off their hands! In fact the whole world is now clued-in to the global glut of natural gas, and without the long hoped-for LNG (Liquified Natural-Gas) projects to suck up the supply (kind of like our SPR [Strategic Petr
