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131 comments on Saudi Arabia Announces They Will Produce More Oil

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research24 on June 22, 2008 - 12:47pm Permalink | Subthread | Parent | Comments top

June 22 (Bloomberg) -- Saudi Arabia MAY raise its oil production beyond a planned 200,000 barrel-a-day increase in July if the oil market requires extra supply, Saudi Oil Minister Ali al-Naimi told consumers at a summit in Jeddah.

I get the feeling that the Saudis are taking rhetoric lessons from Ben Bernanke for the fine art of weasel words. Every press release they give (2-3 per week)offers up different numbers with weasel words like "may" "could" and "possible."

15 million takes the prize. A bit of verbal price manipulation going on here, me thinks.

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xeroid on June 22, 2008 - 3:04pm Permalink | Subthread | Parent | Comments top

I have three questions ... (well more than three actually, but three will do!)

Even if KSA offer an 200,000 extra barrels-a-day, at what price will they offer it, and to whom?

Just because KSA is prepared to produce more, why assume the world's exporters won't still export less?

How do we know that supply and demand will be balanced at or below today's price even with this alleged extra supply?

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celticoil on June 22, 2008 - 6:56pm Permalink | Subthread | Parent | Comments top

Question:

If the Saudi's actually get a barrel of oil down to $100 (even if just by jawboning), and reduce the price of gas by 25% (say, US$3.20 a gallon), wouldn't that increase the use of oil/gas and make it necessary for them and others to eventually pump even more oil over the 10-12 million bpd? Are the Saudi's smart enough to realize this (yes, of course), and if so, what possible pressures are being put on them, or are they putting on themselves, so that they feel led to promise increasing output?

Logically, it doesn't make sense, so there has to be some kind of tangential reasoning going on here. You can only delay the inevitable, unless of course they really do believe there is plenty of oil out there (wherever there is).

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Termoil on June 23, 2008 - 12:07am Permalink | Subthread | Parent | Comments top

Perhaps the Suadis are acutely aware that all around them is an American military force, controlled by a country that does not want to hear that tribute from a troublesome client state is no longer as easy to dig up as it used to be.

The whole exercise this weekend by the Saudis has a whiff of panic about it, attempting to soothe disgruntled customers and divert attention from themselves. It think we will see plenty more of these hurriedly arranged meetings this year and bit by bit MSM might just start to ask better questions each time the meetings fail to deliver anything.

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131 comments on Saudi Arabia Announces They Will Produce More Oil

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