Arabs Start New Currency OPEC Cut Oil Dump US Petro Dollar

[Mrs. Sharon B. Hodge]

Arabs Start New Currency OPEC Cut Oil Dump US Petro Dollar


Max Keiser - Death of US Petro Dollar pt 1


Max Keiser - Death of US Petro Dollar pt 2

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Gulf Cooperation Council to create new currency
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Motley Fools Financial News
January 01, 2009

http://caps. fool. com/blogs/viewpost. aspx?bpid=125230&t=01000...

The breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative.
Any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal

Gulf Cooperation Council leaders yesterday concluded their 29th annual summit meeting in Muscat, Oman with a final approval for the creation of a single currency for the six-nation economic bloc, still targeted for 2010

Saudi Arabia is the largest economy in the GCC and boasts substantial gold reserves.
But whether gold will be included in the currency basket has not yet been decided

Golden opportunity
GCC assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’

The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons

First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative.
Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal

2009 deadline
The project is gathering pace, and no lesser a figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009

It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal.
Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC

Gulf countries are keen to break away from the link with the US dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies


THE INEVITABLE COLLAPSE OF THE US DOLLAR


OPEC will slash 2,2 million barrels from its daily production


Dec 17, 2008 - OPEC made its deepest production cut ever, amid lagging worldwide demand, but prices remain in a slump, Despite the dramatic cut, skepticism remains about OPEC's ability to enforce the action, A separate report in the United States showed oil supplies rose last week.
Bobbi Rebell reports



December 15, 2008 - OPEC May Plan to Cut Supplies Drastically When It Meets in Algeria


December 02, 2008 - OPEC will cut output this month, secretary general El-Bradi says; Report and analysis by Rebecca Mclaughlin-Duane of Bloomberg News



Honour guards stand next to an OPEC poster before the arrival of Algeria's president Abdelaziz Bouteflika (not pictured) in the western city of Oran December 16, 2008


Venezuela's (US 4th largest exporter) Oil Minister Rafael Ramirez is surrounded by journalists in Algeria's western city of Oran December 16, 2008 Ramirez said on Tuesday he would support an OPEC oil supply cut of two million barrels per day (bpd) when the group meets on Wednesday

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Saudi Arabia Says OPEC Will Cut 2 Million Barrels
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Bloomberg
By Maher Chmaytelli and Ayesha Daya

http://www. bloomberg. com/apps/news?pid=20601087&sid=aeUUJ3W6v...

Dec 16, 2008 (Bloomberg) -- Saudi Arabia, the world’s largest oil exporter, said OPEC will cut production by about 2 million barrels a day at tomorrow’s meeting to curb oversupply as demand shrinks because of the global recession

“To bring things in balance there will be a cut in production of about 2 million barrels,” Saudi Arabian Oil Minister Ali al-Naimi told reporters today after arriving in Oran on Algeria’s coast.
Iran, Venezuela and Qatar all said they backed Saudi Arabia’s position

The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, is gathering for the fourth time in as many months after crude prices plunged more than $100 from July’s all-time high. Output targets for 11 members with quotas stand at 27.3 million barrels a day. Crude oil traded at $45.
05 a barrel in New York today

“This might backfire,” said Robert Laughlin, a senior broker at MF Global Ltd. in London.
“OPEC is coming out so aggressively about what the outcome of the meeting is going to be,” and that “may downplay the impact of the decision tomorrow”

World oil demand will fall 0.2 percent next year as the global recession cuts energy consumption, OPEC said today in a monthly report, scrapping a forecast for consumption growth.
Europe’s manufacturing and service industries have contracted in December at the fastest pace in at least a decade, a survey today said

‘Slowing Demand’

“OPEC is struggling to cut enough production to deal with slowing demand and not too much so that they are responsible for a further deepening of the recession,” Adam Sieminski, Deutsche Bank’s chief energy economist in Washington, said before al- Naimi’s comments

Iranian Oil Minister Gholamhossein Nozari said he backs a 2 million barrel-a-day cut at tomorrow’s OPEC meeting.
Nozari told reporters in Oran, Algeria, that he wants to see stockpiles return to their five-year average

Read The Rest HERE


Russia's Deputy Prime Minister Igor Sechin responds to journalists' questions upon his arrival for an OPEC meeting in Algeria's western city of Oran December 16, 2008

Russia could join Opec in a co-ordinated cut in oil production for the first time


December 14, 2008 - Russia is attending next week's summit of the oil cartel OPEC in Algeria along with three other non-member countries - Azerbaijan, Oman and Syria, Faced with a budget deficit at home, President Dmitry Medvedev says he is considering joining OPEC and cutting oil exports to boost oil price



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Russia to join oil cartel moves to cut supplies
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Russia is to join Opec in a co-ordinated cut in oil production for the first time in a move that will further raise tensions with the West

Telegraph UK
By Toby Harnden in Washington
Last Updated: 4:16PM GMT 16 Dec 2008

http://www. telegraph. co. uk/finance/newsbysector/energy/3777700/R...

The Kremlin will risk throwing away its membership of the G8 group of leading economies by acting with the cartel in reducing supplies

Russian leaders have sent strong signals that they will agree the unprecedented move at the same time as Opec convenes an emergency meeting in Algeria on Wednesday

Russia has been under pressure from Opec to cut as many as 300,000 of the 9.
75 million barrels it produces each day to help maintain prices

Dmitry Medvedev, the Russian president, has even hinted that his country – the world's largest oil producer and second largest exporter – could join Opec despite the potential political fall out

In an attempt to arrest a 66 per cent slide in the price of oil, the cartel could this week announce a record cut of 2.5 million barrels per day.
A barrel of oil was trading at $50 on Monday, nearly $100 off July's record high

Russia, which has always resisted joint action with Opec in the past, risks incurring the wrath of the United States if it goes ahead.
Analysts warn that Congress could lead a campaign to have Russia thrown out of the G8

Chris Weafer, chief strategist at Uralsib, a leading Russian investment bank, said: "It would jeopardise Russia's position in the G8 for sure

"If Russia were formally to side with Opec, it would lead to a more belligerent attitude by Congress to Opec and Russia"

A production cut could also provoke a backlash within the European Union, which would undoubtedly view such a move as an "unfriendly gesture", Mr Weafer said

The EU is already seeking ways to reduce its dependence on Russian energy amid growing concerns over the Kremlin's increasingly belligerent and isolationist approach to foreign policy

Yet for Russia, the risks of international isolation are less important than the consequences of oil prices remaining low

The collapse in the price of oil, combined with Russia's massive external corporate debt, has had a dire impact on the country's economy, which has grown rapidly since 2000 thanks to an energy-driven boom

Falling energy prices have prompted foreign investors to withdraw large amounts of capital, while the central bank has spent a quarter of its reserves propping up the rouble

The Kremlin has come under heavy pressure from Saudi Arabia, which has grown increasingly irritated by the way Russia has benefited from Opec cuts without making sacrifices of its own

The 12 members of Opec, or the Organization of Petroleum exporting countries, account for 36 per cent of world oil production

Russia is by far the largest producer outside the cartel, which African and Middle Eastern oil exporters as well as Venezuela and Ecuador

Other members include Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the United Arab Emirates, Libya, Angola, Algeria, and Nigeria

Saudi officials have told the Kremlin that unless Russia joins in supply cuts this time round Opec would not announce significant reductions, raising fears in Moscow that oil could fall as low as $25

Siding with Opec would also effectively cast Russia as a petro-state, a tag the Kremlin has long shunned.
Such a move would therefore unnerve foreign investors and reduce incentives for the state to liberalise the economy, analysts warn

Yet by co-operating with Opec, Russia may be hoping for reciprocation in its ambitions to create a gas cartel – another move that would cause consternation in Europe

Some analysts, however, believe that the EU lacks the political will to respond punitively to a more aggressive Russian energy policy no matter what the level of disquiet in European capitals is

"Russia hasn't been in the business of making the West happy and the West hasn't been in the business of caring in any meaningful way," said Sam Greene, a political analyst with the Moscow Carnegie Centre. "Russia is too important.
It is probable that any action would be swallowed"

One former Bush administration official said: “Russia is increasingly making it clear that it views itself as a strategic competitor to the United States rather than a strategic partner

“Aligning itself with Opec may seem an attractive option for Russia in the short term but there will be costs

“I would not be surprised if Congress decided to take action because Russia is not behaving like a responsible member of the community of nations”


CBS October 24, 2008 - An emergency meeting was held by OPEC to halt tumbling oil prices, A decision to reduce the supply of oil was agreed upon but, as Sheila MacVicar reports, it may not be adhered by officials


September 10, 2008 - OPEC oil ministers agreed Wednesday to trim overall output by more than 500,000 barrels a day in a compromise meant to avoid new turmoil in crude markets while seeking to bolster falling prices


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OPEC: Get set for oil shock and awe
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Press TV
Sat, 06 Dec 2008

http://www. presstv. ir/detail. aspx?id=77696&sectionid=3510213

OPEC president Chakib Khelil says oil markets should prepare for a "surprise" output cut after the organization's Algeria meeting

"A consensus has formed for a significant reduction of production levels" by the 14-member Organization of Petroleum Exporting Countries, Khelil told AP on Saturday

The OPEC head's warning comes as markets have already been expecting an output reduction; however, Khelil said that it could be "severe," suggesting cuts of as much as 2 million barrels per day

A decision that startles markets would help bolster slumping oil prices, Khelil said. "The best way is to surprise them," he said.
"I hope it (the decision) will"

OPEC members are expected to announce their decision during a summit in Oran, Algeria, on December 17

The decision comes as crude prices slipped to $40.81 a barrel on Friday, the lowest level since May 2005.
This is while only in July, prices peaked at record highs above $140 a barrel

The Saudi Arabian king earlier said that $75 a barrel would be a fair price, an idea that has received the support of other members of the organization

Khelil urged oil producers outside OPEC to help the organization boost prices, especially Russia.
Moscow had earlier said it could sign a cooperation memorandum with OPEC in Oran

"We hope that Russia will apply (quota decisions) ... as if it were an OPEC member,'' he said, adding that the OPEC decision is not intended to "hurt the world economy"

Exporters have been pummeled with low prices, falling demand and declining revenue as a result of the dark outlook of the global economy

Earlier in November, Khelil was quoted by the Algerian newspaper El Khabar as saying that the group's member states had lost about $700 billion due to falling oil prices


October 20, 2008 - The head of the Organisation of the Petroleum Exporting Countries (Opec) has said that the organisation must order a "substantial" cut in oil production when the group meets in Vienna next week, Inside Story asks who is responsible for the drop in oil prices and if it is related to the current financial crisis


October 23, 2008 - With the oil price plummeting below $60 barrel, Opec ministers are on their way to Vienna for an emergency meeting, Iran wants OPEC to cut production by 2 million barrels a day - this is a massive cut - the last one was only half a million barrels, Al Jazeera's Nicole Johnston spoke to Abdullah Bin Hamad al-Attiyah, Qatar's Opec Minister, about the tumbling price of oil


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Opec hawks want to cut oil production to keep up price
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The Times UK
October 17, 2008

http://business. timesonline. co. uk/tol/business/industry_sectors/...

Carl Mortished, World Business Editor: Analysis
Opec’s mettle will be tested next week when the cartel assembles in Vienna at a hastily convened meeting to discuss the economic crisis and whether the exporters’ club should take action to arrest the fall in the price of crude oil.
Mounting alarm over the dwindling rent from oil sales prompted Opec yesterday to bring forward an emergency meeting scheduled for mid-November to next Friday

Together the cartel members have lost about a billion dollars of revenue a day since crude price peaked in July. The benchmark US Light crude price fell $5 per barrel on the New York Nymex exchange yesterday to $69.15 (£40.05), less than half the value at oil’s peak, while London’s Brent crude futures contract fell to $65.
70

Evidence of rising oil stocks in America and weakening demand for energy in China’s mills and workshops has speeded up oil’s decline, but there is no agreement within the cartel over price strategy. Opec hawks, such as Iran and Venezuela, want to shore up the price by turning off the taps, but neither country can afford to cut output and forgo revenues.
Both are failing even to produce at their agreed quotas because of weak investment in their oil industries, so the burden of any cut will fall on Kuwait and Saudi Arabia

The Saudis would not like to see the price falling below $60 per barrel, a level at which most economists reckon the kingdom can support its profligate princes, the social security bills and invest in the oil industry. However, the Saudis will be listening to the grinding cogs of the slowing Asian industrial juggernaut with mounting concern.
A deep recession might precipitate an oil price collapse

It is Saudi Aramco that has been responsible for the weakening oil price, pushing more oil on the market since the energy summit in Jedda.
According to Platts, the oil pricing publisher, even as the price tumbles Saudi Aramco has supplied every refiner’s request to lift Saudi crude next month

The wider question is what impact falling crude will have on nonOpec oil output. Russia’s budget depends on a $70 per barrel price, according to Aleksei Kudrin, the Finance Minister.
But Russian oil output is already falling because of weak investment, as is Mexican production

The major Western oil companies can probably stomach prices dipping temporarily to $60 for a few months and still pay their dividends, but a prolonged slump at $50 per barrel would lead to the scrapping of investments followed by another cycle of shortages and soaring prices.