Saudi Arabia will increase oil production by 300,000 barrels a day, a modest jump. The price of crude may drop some on the news.
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 down 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 supply battle for oil may be nearing an end, at least for now.
Douglas A. McIntyre is an edtor at 247walls.com.
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Reader Comments (Page 1 of 1)
5-19-2008 @ 10:01AM
moonie said...
LET THE GREEDY ARROGANT SAUDIS HEAR THIS i'm starting a national protest don't buy gas from Exxon gas stations there are 2 more gas stations that deal Opec oil,..teach them a lesson, then when their oil starts to rot in the ground, THEY WILL REMEMBER THIS please help DON'T BUY OIL FROM OPEC SUPPORTED GAS STATIONS namely EX-XON PASS THIS ON AMERICANS DON'T BE A SUCKER GRRRRRRRR!!!
5-19-2008 @ 10:07AM
moonie said...
DON'T BUY ARROGANT SAUDI OIL FROM OPEC, DON'T BUY OIL FROM EXXON THATS OPEC AND IT COMES FROM SAUDI ARABIA. THIS IS A NATIONAL PROTEST OF TOP PRIORITY, I'M GONNA PASS THIS TO AS MANY BLOGS DAY AND NIGHT COME ON AMERICANS DON'T BE A SUCKER LET THEIR OIL ROT IN THE GROUND GRRRRRR !!Mobile is another one ah haaaa GRRRRRRRRRRRRRR !!!
5-19-2008 @ 10:11AM
B. Harrison said...
it's past time for the USA to "start playing hardball" with the Arabs and the Royal families, especially Saudi Arabia. (We reportedly only get 4% of our oil supply from the Saudis.)
The Saudi Royal family depends significantly on U.S. support to prevent the radical extremists from overthrowing them (especially with the help of other radical Arabic countries like Iran.)
Since the Arabic countries are, in essence, draining us dry economically, what do we have to lose by getting tough with them. If they reasoanbly support us and sell at reasonable price levels then we will support them. If they continue to squeeze us for every dollar that they can, then we should withdraw our support.
Our Congress is greatly at fault by not having had our own oil resources developed to provide a competitive alternative. At this point in time, damn the ultra conservationists who oppose drilling for oil. Our country is not going to be able to do any type of conservation if our economy is in shambles.
The USA needs to adopt a policiy whereby our foreign aid, and our political support is given to those who EARN our assistance via their support of our country. Otherwise, let them go to the Arabs or the Chinese for their assistance.
5-19-2008 @ 10:12AM
moonie said...
HARRISON IM PISSED I'VE HAD ENOUGH, DAMN THEM where the h--l do they think supports and defends them arrogant a------s
5-19-2008 @ 10:17AM
moonie said...
You're 1000% RIGHT Harrison i'm going to as many blogs as i can day and night to protest lets stand up STAND UP AMERICANS DAMN WHAT DOES IT TAKE????
5-20-2008 @ 8:30AM
Dan Barnett said...
Harrison:
Did you hear of the $4 billion arms deal the Saudis made with Russia? They have other sources of weapons.
With the US Army otherwise occupied, what do you mean by "getting tough"?
Back in 1939 my parents had a word for a country that "got tough" with other countries to get their resources cheaply.