>>I often wonder why OPEC increases oil: nearly all of the exporting countries would be financially better of if the oil sold at higher prices for longer times<g>.
>
>1. They may suspect that they can provoke a world-wide economic disaster, and they want to avoid that, since it will eventually affect them, too.
I'd agree if it were something valueable but not essential to the economy: spices in middle age for instance. But essentials should keep their intrinsic worth: as soon as enough oil is released again it should be used up.
>2. If oil prices are too high, there is more incentive for other countries, to seek alternative energies.
Granted that alternative energies perhaps could be cheaper if mass-produced, to be able to atack on price would mean a lot of new invention. OPEC could have hiked the price to 80$ for the last 15 years at least - I had expected it to climb steadily at much higher rate from 73 on.
>3. Finally, they may want to stay competitive compared to non-OPEC oil producers.
They sell their "capital" - ok they have to bribe the population, but why sell so much that they have to build where they KNOW some will be just a bad investment. Probably much is "invested" to get out of paper currency - so why not leave it as crude ? Middle east is definately hard to grok for me - I expect rational markets<g>.
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