UAE Quits OPEC

[Tom8]

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

[Spare tyre]

Tom8 said:

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

For a thicko like me, what does the is mean for me

[Randy Winkman]

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

[ziggy328]

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

[phil4]

Spare tyre said:

For a thicko like me, what does the is mean for me

Opec as the article states is a cartel, that is they agree to fix and control supply to keep prices as they want.

UAE leaving means it won't follow those directions, which means potential competition with OPEC, ie. producing more or charging less. Of course they may decide to wind up oil production and push the price up.

[Mr Pointy]

ziggy328 said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

Margin is a percentage of the costs not a fixed sum of money so if the sell price goes up so does your profit.

[isaldiri]

Tom8 said:

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

UAE aren't exactly quitting OPEC to 'benefit people' so why on earth would you expect that...? It's likely just an escalation of the Saudi/UAE spat that has been worsening of late (Yemen/Sudan involvement etc) anyway....

ziggy328 said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

No one was too fussed by Pfizer and other pharmas making a killing over covid......why the double standard with oil companies?

[ziggy328]

isaldiri said:

Tom8 said:

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

UAE aren't exactly quitting OPEC to 'benefit people' so why on earth would you expect that...? It's likely just an escalation of the Saudi/UAE spat that has been worsening of late (Yemen/Sudan involvement etc) anyway....

ziggy328 said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

No one was too fussed by Pfizer and other pharmas making a killing over covid......why the double standard with oil companies?

Because it puts everything up. Not difficult to grasp, neither is lowering the margin % so profits don't double.

[isaldiri]

ziggy328 said:

Because it puts everything up. Not difficult to grasp, neither is lowering the margin % so profits don't double.

Oil companies aren't a charity and they don't get recompense when crude prices tank and they end up with significant losses. How much extra profit is acceptable for any company to have then as you think 2x is too much and are you going to apply that across the board? Or is it only for oil companies?

[JagLover]

ziggy328 said:

Because it puts everything up. Not difficult to grasp, neither is lowering the margin % so profits don't double.

BP don't set the price of oil or products produced from it.

Most of their costs are fixed and they sell their outputs at the prevailing market rate. Moreover the UK makes up 15% of their total revenue.

Personally I think BP need their head examined to still be HQ here with the prevailing political winds. They should have moved their HQ to the USA.

This is not only due to taxation risk but the growing trend for companies involved in mining or fossil fuels to be sued in British courts. Apparently there are UK based ESG funds set up for that exact purpose.

[BikeBikeBIke]

Tom8 said:

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

Yeah, I'm struggling to see how a country leaving a cartel could be anything other than good for consumers.

[Paddymcc]

Is this part of the deal with USA in order to get a lend of some dollars as theyre a bit short at the moment?

[BikeBikeBIke]

Paddymcc said:

Is this part of the deal with USA in order to get a lend of some dollars as theyre a bit short at the moment?

If I had to bet I'd say they've left to sell oil in larger quantities to keep the price down to suck up to America. What they get in exchange I can't guess.

[Spare tyre]

phil4 said:

Spare tyre said:

For a thicko like me, what does the is mean for me

Opec as the article states is a cartel, that is they agree to fix and control supply to keep prices as they want.

UAE leaving means it won't follow those directions, which means potential competition with OPEC, ie. producing more or charging less. Of course they may decide to wind up oil production and push the price up.

Fankoo

[CoolC]

Mr Pointy said:

ziggy328 said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

Margin is a percentage of the costs not a fixed sum of money so if the sell price goes up so does your profit.

Point of order. Margin is a percentage of sales value, not cost.

[Countdown]

ziggy328 said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

Tend to agree with your last statement, if revenues surged then I get that, but no need for profits to double.

It's basic supply vs demand.

[Countdown]

isaldiri said:

Tom8 said:

https://www.bbc.co.uk/news/articles/cj4pxwlr52yo

Wow, this could be a big shift in the energy sector, one which maybe finally benefits people perhaps?

UAE aren't exactly quitting OPEC to 'benefit people' so why on earth would you expect that...? It's likely just an escalation of the Saudi/UAE spat that has been worsening of late (Yemen/Sudan involvement etc) anyway....

It's very much this.

As others have pointed out the UAE currently has a liquidity crunch and wants the US to lend it some money. I've no doubt that leaving OPEC is a quid pro quo. There is also a growing rivalry between the KSA and the UAE.

Athough in theory this might increase supply of oil and therefore reduce price that would hurt US oil producers as their "cost of production" is higher than those in the Middle East so whilst it might benefit US consumers it will have a negative effect on the likes of Chevron, Texaco etc

[Snow and Rocks]

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

That's from a global turnover approaching 50bn - a net profit of 7% hardly seems beyond the pale.

They're also not a charity - what do you expect them to do?!

[Randy Winkman]

Snow and Rocks said:

Randy Winkman said:

Since this is also about oil on the BBC website.

https://www.bbc.co.uk/news/articles/c2eveyvgn9no

"BP profits more than double as Iran war sends oil prices higher"

Must admit I'm slightly struggling with the concept that they make more money in such testing times.

That's from a global turnover approaching 50bn - a net profit of 7% hardly seems beyond the pale.

They're also not a charity - what do you expect them to do?!

I agree on them not being a charity. But they are in competition with others.

[BikeBikeBIke]

Countdown said:

Athough in theory this might increase supply of oil and therefore reduce price that would hurt US oil producers as their "cost of production" is higher than those in the Middle East so whilst it might benefit US consumers it will have a negative effect on the likes of Chevron, Texaco etc

Voters (including me) are more interested in cheaper energy than oil company profits.