Open Question
Maybe...
May 17, 2008
Saudis To Up Oil Production After US Pressure=$100 Oil
Saudi Arabia will increase oil production by 300,000 barrels a day, a
significant jump. The price of crude should drop sharply when the market opens.
According to the FT "Analysts said it was likely that Kuwait and the United Arab
Emirates, which have spare production capacity, would follow the Saudi lead and
raise output." If other OPEC members follow, oil could be pressured back toward
$100 as supply increases and speculators move out of the market and cover bets
on prices moving above $130.
The leading OPEC members are almost certainly worried about the incredible run
oil has had to reach over $127 a barrel. At some point, and that point may be
now, the price of crude will throttle the economies of the West and emerging
markets like India and China. A sharp drop in demand would leave most producing
nations with expensive oil-producing infrastructures running well below
capacity.
The tipping point for oil prices may have arrived.
Douglas A. McIntyre
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I don't buy it's effect as anymore than a short correction. There's vast amounts
of speculative liquitity that will keep pumping the bubble - fundamentals
disappeared from the price long ago.
Either pull/increase the margins like the Pi guy and I keep pounding the table
on, have the dollar rise significant to scare the money out or run out of fresh
buyers when everyone's bought.
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What if the Saudi's have already laid their cards on the table. Rueters reports
Saudi Arabia intends to achieve the following additions to capacity: Khursaniyah
(500,000 b/d) early in 2008, Shaybah (250,000 b/d) late in the year, and Nuay
yim (100,000 b/d) late in year 2009.
Maybe, due to dwindling reservoirs and increasing costs of oil extraction, OPEC
is losing its grip on being the self-annoited global oil king in a world that
snickers at the oil-addicted US for not drilling for oil off its own coastline.
The current energy environment has now taken on a life of its own, transitioning
from oil (which will be price-rationed going forward) to implementing
alternative sources.
Flexibility and adaptability accompanied with proper trading and investing will
make the trek worthwhile regardless of the outcome.
In the meantime, observe Brazil (oil, natural gas, bio-fuel, refineries) as it
becomes the last prominant merchant of global energy.
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i think they decided to increase befor the prez. went there, 300,000, doesnt
seem like much 87000000, a day is what the world consumes, i think thats right,
we produce 85mil
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