The Zephirin Group

OPEC: Lemonade Cartel

Phil,

We had a good conversation going. You point out that Iran oil export is eating into its own energy usage, which is correct—However, your conclusion to personally assume the reason to harbor nuclear energy is out of context. And is not Iran specific problems. All oil producing countries had these problems and those who have not yet, will have it, sooner then later. Most would argue that isn't the same reason why the US builds nuclear plants (alternative energy usage) as the population was eating into its own internal oil production? The simple answer is YES. Even that is not enough as the growth of population and the diminishing of oil wells in the US was more than evidence for the US to import oils and will continue to import oils.

OPEC: Lemonade Cartel

Yes your math is questionable! Look like you are mixing coffee with lemon. Iran produced approximately 3.75 - 4MM/bbl. Iraq produced approximately 2MM/bbl. OPEC's revenue is based on its own price basket not current WTI Prices or an average?. OPEC (including Iraq) is currently producing approximately 29.890MM/bbl as of the latest data. That is approximately 1.3% lower than what was produced two years ago - 30.280MM/bbl. The proposed quota is approximately 28.000MM/bbl and a production cut is neutral to the market.

And is not just another lemonade stand as oil from the Middle East cost less to refine versus from other region. Also, keep in mind that oil is a by-product and frankly, has nothing to do with how much SUV's we purchased!

FYI Iran is expected to earn approximately $49.2 Bil. this year and only a slight increase from 2005 of $46.6 Bil.

The issue is not OPEC is simply traders making the wrong bet.

Bulls Versus Bears on the Oil Outlook

Apprently bullish for the wrong reason. I would stay clear of oil as we will have a supply glut in the market starting in November 2006.