In order to keep investors interested in oil companies, OPEC has agreed to cut production by 2.2 million barrels a day, according to news reports. This is an effort to stop plummeting prices for petroleum.
Wiping off the rear view mirror I glance back at mid summer, when prices were spiraling upward and headed for unprecedented heights.
Neither the highs nor the lows are based in what you could call reality. But the highs were probably closer to the truth. So why not let us enjoy our illusion for a while? The market will correct eventually.
I know, I know. Petroleum is already an artificially modulated commodity. Like every other commodity in our economy, its price no longer reflects just the costs associated with bringing it forth from its raw state, shaping it into a usable form and transporting it to users. Everything gets tweaked or nudged if not outright bludgeoned and abducted. Values are manipulated to squeeze out more profit when possible. Does this compensate for the periods of loss or actually create them? A little nudge or a big shove upward seems to invite a countervailing downward motion in prices at some point.
Petroleum producers know they're dealing with addicts as surely as a drug dealer does. For the few of us who go into rehab and make it work, many more just keep on using. Money's just tight right now, okay? Just hook me up this once. Tide me over. I need this stuff, man. You don't understand!
Investors and people who service them will appreciate OPEC's move. People who can afford to pay a little more at the pump will welcome the lift this brings to their portfolios. Everyone else can just pump it and bitch.