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Saudi Arabia Hesitant to Join OPEC in Production Cut
Despite earlier pledges to hold oil output steady, the Organization of Petroleum Exporting Countries (OPEC) yesterday (Wednesday) announced that it would cut production by 520,000 barrels per day in an effort to “strictly comply” with the production quotas set last September. However, Saudi Arabia, the cartel’s largest and most influential member has indicated otherwise.
The cartel, which controls 40% of the world’s oil exports, pointed to such factors as tumbling demand, greater supply, the dollar’s recent rally and an easing of political tensions – all of which have contributed to a 30% drop in oil prices over the past nine weeks.
“All…
11Sep2008 | Money Morning | Comments Off | ContinuedSupply and Demand Shape Commodity Markets
The commodity bull market has a long way to go. This bull market is not magic. It’s not some crazy “cycle theory†I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff.
In the 80s and 90s, when people were calling you to buy mutual fund and stocks, no one called to say, “Let’s invest in a sugar plantation.†No one called and said, “Let’s invest in a lead mine.†Commodities were in a bear market and in bear markets people do not invest in a productive capacity. They never have. Perhaps they should…
25Aug2008 | Whiskey and Gunpowder | Comments Off | ContinuedSaudi Arabia’s power struggle
America is not alone when it comes to Peak Oil versus cornucopians. Saudi Arabia has its own factions, each led by former executives at Saudi Aramco.
Today’s edition of Mr. Murdoch’s new rag spins a pretty good yarn of Sadad al-Husseini, who’s convinced Saudi Arabia’s salad days are behind it, and his one-time protege Nansen Saleri, who thinks the best is yet to come.
Most illuminating is how Saudi Arabia’s senior leadership is ping-ponging back and forth between the two outlooks as oil sits at record-high prices.
In recent months, Saudi leaders appeared to have adopted Mr. Husseini’s view. Local reports quoted King Abdullah saying…
30Jun2008 | Desidooru Saloon | Comments Off | ContinuedEnergy Q&A Part I: Peak Oil and Oil Price Spikes
Q: “I saw you on Fox Business News. You said that you think the price of oil is too high and will come down. You have been a long-time ‘Peak Oil’ guy. So why do you think that oil prices will come down?â€
Yes, I’m a long-time Peak Oil guy. I met M. King Hubbert back in 1977 at Harvard, and heard his lecture on where the trends are taking us. So I’ve been doing “Peak Oil†since Peak Oil wasn’t cool.
Long term, I am convinced that we live in a Peak Oil world. But we also live in a world of…
19Jun2008 | Energy and Oil | Comments Off | ContinuedSaudi Arabia’s Promise to Open the Oil Spigot is Nothing But Spin
First it called for a meeting of oil producers and oil consumers.
Now Saudi Arabia has proposed a boost in oil production.
At the end of the day, however, neither of these moves will have any real impact on the ongoing escalation in oil prices.
Let me explain …
The Saudi Spin
When Saudi Arabia called for a summit on high oil prices recently, it said there was “no justification for the current rise in prices†– and used the opportunity to express concern that high oil prices could harm the global economy.
That’s why Saudi Arabia also wants to work with its cartel compatriots in the Organization…
17Jun2008 | Money Morning | Comments Off | ContinuedSaudi Arabia Agrees to Increase Oil Output After Crude Hits Another New High
Oil soared to yet another record high on Friday after Goldman Sachs Group Inc. (GS) raised its price forecast for the second half of the year. However, during a visit with Saudi Arabia’s King Abdullah U.S. President George W. Bush was able to convince the world’s leading oil exporter to increase its output.
Light sweet crude for June delivery jumped $3.31 a barrel, or 2.7%, to reach $127.43 in electronic trading on the New York Mercantile Exchange. Oil prices have now soared 103% in the past 12 months.
The jump was largely attributable to a new prediction from investment-banking giant…
19May2008 | Money Morning | Comments Off | Continued
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