Brazil Wants to Join OPEC

[Kampfbaer]

Brazilian President Luiz Ignacio Lula da Silva wants to get his country into OPEC -- a move that could lower the price of oil worldwide. With a booming biofuel business alongside new oil reserves, Brazil is poised to become a global energy leader.

In 2007, a huge oil reserve was discovered off the coast of Brazil's Rio de Janeiro. The find boosted Brazil's oil reserves by 40 percent and could catapult the South American nation into the top rank of global producers. In an interview with SPIEGEL President Luiz Ignacio Lula da Silva said that Brazil wants to join the OPEC oil cartel -- a move that could lower petroleum prices worldwide.



http://www.spiegel.de/international/world/0,1518,552591,00.html

[0rphie]

And why would that move lower the oil prices?

[Solomin]

And why would that move lower the oil prices?

I'm with you here. Can't see the economics behind it.

[Kampfbaer]

Just a guess:

higher production capacity = lower price for oil

Probably someone more in the know about oil production and the OPEC can shine more light on this.

I would wish for lower oil prices sure as hell, here in Germany the price for 1 litre unleaded Super fuel (95 Oktan) is about € 1,50 .

Edit: I just found this:


http://money.cnn.com/2008/02/22/news/international/brazil_opec/index.htm

But this article talks about prices going up if Brazil joins OPEC, I´m a bit confused right now???

[Stonewall71]

the speculators will always find a way of increasing of oil prices, even if we were swimming in oil.

I already lost hope.

[Winger]

And why would that move lower the oil prices?

Exactly, thats the point of OPEC isn't it, to maintain prices & not lower them? It's a cartel. They control what goes out and at what rate to ensure an optimum return and keep the price higher. Ultimately demand sets the price but their controls do add to it to start with. The idea that it would bring prices down makes it laughable.

Brazil staying independent and flooding the market with their fuels would better to bring down the price.

[Solomin]

It sensible, if Brazil increase production greater than the demand is rising, prices go down, but I don't see any linkage to them joining OPEC to lowering of prices.

The only argument that can be made is that if Brazil joins, they then have influence on OPEC to increase their production. This is such speculation it is ridiculous to put it in the article. The journy probably just put that in there to get people to read it.

[donllano]

Simple, if Brazil joins OPEC, the cartel (if they decide to) can manage more easely the market price of oil.

[Warlord]

Brazil joining OPEC is them (Brazil) protecting its interest with undue influence from other countries, the USA pressumably. What worries me is what member Venezuela will be whispering to this emerging Latin neighbor. Would it lower the price of oil? Doubtful.

[Hollis]

Part of the high prices is because of a destabilized international market. It is not so much the producers as it is the speculators who buy future oil production.

Offering that amount of oil, could reduce fear of future oil shortages caused by some ME conflict. The high prices tend to be based on the speculation of what future supplies will be.

[Ordie]

Question: Does OPEC want Brazil? The Saudis are the price setters. Does Brazil's reserves and production capacity threatens the Saudi's power within OPEC.

Likewise, the governments of Venezuela and Iran are dependent on the high price of oil for thier politically motivated pet projects. Would they like to see more oil production by way of Brazil?

The way I see it Brazil is in the best position. Domestically it is energy independent with a good balance of trade with exported agricultural and industrial goods. The key areas of concerns are income distribution and social cohesion especially in the urban areas.

Geographically Brazil is isolated away from any trouble spots and its ports offers direct access to Europe, and North America. However, if a spill were to occur, it will follow the currents towards Uruguay and Argentina then out towards the South Atlantic Doldrums. (Not good for the Tristan da Chuna crayfish industry) or get trapped along the coast between Rio and Florianopolis.

The danger for Brazil is the possibility of getting the "Dutch Disease" and abandon argiculture and industrial productivity in favor of oil production. In a nutshell: why produce when you can buy from others?

But overall in my opinion:
Brazil will always be the country of the future.

[Bandeirante]

Brazil has always been a powerhouse
We never had it better !
We have oil, ethanol, hydro-electric power, the Amazon and a splendid future !
And we are in our land, the land of our Ancestors, we had not to migrate to strange lands because we conquered our own beautiful land !

http://www.militaryphotos.net/forums/showthread.php?t=133939

[KEEPER0311]

Plus, you got some crazy footballers, hitting transvestite prostitutes with cars. ;)

[Bandeirante]

Plus, you got some crazy footballers, hitting transvestite prostitutes with cars. ;)

Crazy rich footballers !
:)

[Dave242]

Brazil staying independent and flooding the market with their fuels would better to bring down the price.

The only way to bring down the price of oil is a stronger Dollar or or sell in Euro's

Dave