Indonesia Suspended From OPEC. What Does it Mean?

[Vanhelsing]

Reuters.

The source also said OPEC, at a ministerial meeting in Vienna, had agreed to suspend Indonesia from the Organization of the Petroleum Exporting Countries .....

Can someone more understanding of commodities explain to me what consequences and advantages there are to Indonesia not being a member of OPEC?

 

[sumyunggai]

Indonesia was a founder member of OPEC at a time when its population was maybe 1/3 of today
Since that time oil production hasn't increased but consumption has grown massively. Hence Indonesia is not a net exporter of oil and its interests are not furthered by higher oil prices. So it doesn't belong in OPEC

 

[Vanhelsing]

Ah, I see. Appreciate you taking the time.

 

[Zavia]

sooo what is the possible consequences...?

 

[Davita]

Indonesia rejoined OPEC only less than a year ago...but OPEC now wants to cut production and that isn't in Indonesian interest so they have suspended their membership.
Consequences are the price of crude jumped today and will continue upwards if OPEC sticks to its commitment. Indonesia will maintain or increase production as it doesn't need to adhere to OPEC rules...and will benefit from higher prices.

 

[fastpitch17]

Indonesia rejoined OPEC only less than a year ago...but OPEC now wants to cut production and that isn't in Indonesian interest so they have suspended their membership.
Consequences are the price of crude jumped today and will continue upwards if OPEC sticks to its commitment. Indonesia will maintain or increase production as it doesn't need to adhere to OPEC rules...and will benefit from higher prices.

Oil prices dropped.
http://en.tempo.co/read/news/2016/11/30/056824256/Oil-Prices-Drop-4-Percent

 

[Davita]

Oil prices dropped.
http://en.tempo.co/read/news/2016/11/30/056824256/Oil-Prices-Drop-4-Percent

That's already old news...
My comment was based on OPEC already made a deal and even now...not yet midday in London....Brent crude is over US$52 a barrel.
We'll need to wait a few hours before Chicago opens to see how they react to the news.
[h=2][/h]

 

[jukung11]

Also Indonesia's reserves and capacity is getting low. Many oil wells are nationalized or taxed. Oil is a major source of revenue for the budget and was a key reason this year's budget shortfall. The country produces as little now as the 1970s and it is falling. I think the country uses almost twice as much as it produces. Cutting production would hurt Indonesia more than almost any other open nation other than Venezuela. I don't know why they rejoined opec to begin with.

 

[waarmstrong]

That's already old news...
My comment was based on OPEC already made a deal and even now...not yet midday in London....Brent crude is over US$52 a barrel.
We'll need to wait a few hours before Chicago opens to see how they react to the news.

I suspect that the increase in oil prices will soon be old news, as well. OPEC does not have the clout of years past, and besides that, its members are notorious for cheating, fudging the numbers.

 

[Davita]

I suspect that the increase in oil prices will soon be old news, as well. OPEC does not have the clout of years past, and besides that, its members are notorious for cheating, fudging the numbers.

I agree and why I said in my post #5 "if OPEC sticks to its commitment". Saudi is running its countries social welfare at a loss...for how long can it afford to do that?

It could be a storm in a teacup as the following doesn't offer too much of a commitment....JP...."The accord comes into effect at the start of 2017 and will last six months. The pact also calls for an additional 600,000 barrels a day reduction from non-OPEC suppliers. Non-member Russia will cut by as much as 300,000 barrels a day “conditional on its technical abilities,â€

Indonesia immediately opted out as it refuses to comply with any reduction.

IMO Indonesia should restart exploration and build refineries then wouldn't need to import so much refined gasoline from the crude they actually produce. They could sell back to ASEAN countries at a guaranteed price-point and avoid the OPEC cartel....which has used its profits to create mid-east conflict and purchase properties in other countries. Only Abu Dhabi seems to have diversified its profits.

I hope to live long enough to see Arabs back to sleeping in Bedouin tents and riding camels.

 

[waarmstrong]

I agree and why I said in my post #5 "if OPEC sticks to its commitment". Saudi is running its countries social welfare at a loss...for how long can it afford to do that?

.... I hope to live long enough to see Arabs back to sleeping in Bedouin tents and riding camels.

Remind me. How old are you, Davita?

 

[Davita]

Remind me. How old are you, Davita?

hahaha...OK I was using a little 'tongue in cheek' comment which you picked-up on...:lol:.... but may I remind everyone of the Italian lady who, last week, celebrated her 117th birthday and said she eat 3 eggs every day....one raw, one boiled and one fried.

Going to have lunch in the pub and maybe a pint or two of Bintang...hate eggs...

 

[serious_fun]

...maybe a pint or two of Bintang.

Why not enjoy good beer?

 

[Davita]

Why not enjoy good beer?

I'm coming to Hong Kong next week on a cruise ship.....do they still serve San Mig?