OPEC grasping at straws. No, U.S. and Norway will not join the OPEC oil price fixing club.

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(edited)

Here is one of my WhatsApp replies to an oil analyst in the Middle East (who shall remain unnamed).  I was responding to his comment that OPEC has invited all 97 producers including US and Norway to join them, and his opinion that it's doubtful if the US would even consider joining.

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US will not join a price cartel, it is highly illegal under US law.

OPEC is grasping at straws, attempting to be relevant, when they are simply a gangster price fixing cartel.

OPEC countries really need to clean their own houses and fix their (mostly) absolute, corrupt dictatorships which require oil to stay above $80 in order for the dictatatorships to stay in power.

Take oil out of the equation, and what do most OPEC countries have to offer the world?  Not much of value as far as I can see.  Saudis are THE WORST at offering nothing of value to the world except huge amounts of oil.

Remove oil from the equation, and Saudi Arabia collapes as a useless one trick pony with zero other skill sets.

Aramco IPO is a gangster play by Saudi royalty to get quick cash and stay in power.

Any Aramco IPO will quickly crash and burn in disaster, not long after the IPO.  Way too highly overvalued and overhyped.  Investors will get massively burned.

Just my opinion.

 

Edited by Tom Kirkman
Added link to OPEC inviting 97 countries to join
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And a follow up, after I sent my WhatsApp comment above.

Here is what the analyst in Dubai will be publishing (after chuckling at my rant).  His words are far more measured than my rant, but it's nice to have one's points taken into account, and re-worded and combined with other thoughts, into something much better:

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In an unprecedented move OPEC has invited all 97 producers to join the OPEC plus coalition to help balance the market = propping up prices through production cuts. Here are my takeaways:

- it’s highly unlikely that the US which is now the number one producer will join. The US is very anti monopoly and frowns on price manipulation. This was the basis for Trump's proposed NOPEC bill which sought to penalize countries that engage in price manipulation 

- unlike OPEC members which have NOCs controlled by government, the US oil and gas sector comprises independent producers that set their production targets based on price set by market forces. The department of energy managed by the Secretary of Energy is more of a policy maker, regulator and facilitator and not a player. 

- the US is not solely dependent on hydrocarbons for its revenues. The conversation OPEC should be having is one of economic diversification- growing the non oil sector by reinvesting revenues derived from petro dollars. 

- with regard to diversification countries should be asking

1) what are my competitive strengths and comparative advantages

2) what is required to diversify from oil - physical, financial and Human Resources. Develop a strategic map.

 

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