NOWHEREMAN

Expect OPEC to Cut Production

Samerca: IMO,

As oil rises the dollar will drop not the other way around, the other developed industrialized nations are not as dependent on oil as we are.

The Saudi's, Kuwait and Russia are the swing producers. Russia, Iran and Qatar produce some 60% of the worlds Natural Gas and are in talks to create their own mini-cartel for NG.

Sometime within the next 3 months, Iran will activate the first Nuclear Reactor in the Arab world. They will literally be the Power to deal with in the Gulf States after this activation.

The analyst who made the $25 oil prediction stated in a CNBC interview that it presuppossed a condition which he did not believe would occur. It was a worst case scenario which required a worldwide negative GDP and which assumed a negative GDP in China and India as well. As an analyst, he said he felt a worst case scenario was justified with the current economic conditions.

The Media took it out of context.

A recent energy association study concluded that currently producing oil fields were being depleted at an annual rate of 6.7%. This translates into 5 million barrels daily if production rates are not curtailed. This is a supply issue. It doesn't matter whether demand for it materializes now or later. Supply is depleted even as oversupply is created driving the price down. An additional cut of around 3-4 million barrels is needed to offset this annual depletion in worldwide supplies.

At this point in time, the dollars strength is hurting the purchasing power of the Asean Zone. Meanwhile, Recssions in the developed world are hurting Asian exports as well. They can purchase less with their own currencies and are unable to sell what they produce even if they can sell for less than other developed world producers.

IMHO, the only thing which can counter the deflationary spiral in progress is a large inflationary dose in the form of oil which would affect all aspects of our economy.