Actually everbody was overproducing, of all types of crude: the various indices moved together and rarely deviated from each other by more than a very small percentage. The glut was in no way a phenomenon specific to any given type of crude.
Because they didn't trust each other. For all intents and purposes, the cartel ceased to function as a cartel, and become every producer for himself. At any given price point, pumping more earns you more. Of course you can push the price up if everybody cooperates... but they didn't cooperate. Of course by the 80s non-OPEC production was a majority of global production anyway, which cut into OPEC influence even more.
Again, not correct: the glut extended across the entire spectrum of crude types.
Of course if you put oil on the market, the price will drop, unless somebody somewhere cuts back production to compensate. Of course the ability of the US to sustain those sales is limited, and everybody knows that releases from reserves will have to be replaced, creating excess demand that will drive prices back up.
You need to stop assuming that everything that happens is the result of intentional planning.
This is a good general briefing on what went on:
http://www.e-ir.info/2012/12/28/worl...es-and-crises/
These are key paragraphs:
It's all worth reading, though. Again, I don't think there's a single serious oil market analyst on the planet who buys your premise. Do you know of any?One of the major factors causing overabundance of world oil was OPECs inability to limit its production sufficiently to support a given price level. Between 1979 and 1982, demand for OPEC oil dropped by 40 percent, consequently all members decreased production by at least 20 percent. Nearly all OPEC members bore the brunt of limiting production, although certain members made larger cuts: Saudi Arabia, Kuwait, and Libya reducing output by 65 percent, 60 percent, and 50 percent respectively. Yet even with this drop in output, prices continued to fall. This put pressure on producers to make up for falling revenues by increasing their output.
Eventually, towards the end of 1985, Saudi Arabia announced that in riposte to other OPEC members’ repeated violations of their respective production quotas, it would no longer play the role of ‘swing producer’ and would instead attempt to increase its share of world oil by selling oil at whatever prices the market would bear. As OPEC abandoned all production and pricing agreements, OPEC output rose by 25 percent, between 1985 and 1986.[8] (Gately 1986: 241-242) Of course, this only added to the world oil glut, causing oil prices to fall below $10 a barrel, which in real terms is lower than the $3 per barrel price that prevailed before the 1973 price shock. (Georgiou 1987: 298)
EIA has a similar take:
http://www.eia.gov/pub/oil_gas/petro...2000.htm#T_10_
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