Saudi oil output to rise in July (not news?)
.
I thought this was news.
Sitting in the UK, paying something like £1.17 a litre (USD 2.30?) for petrol, it SEEMS like very big news!
USA uses all the oil, we (in the rest of the world) pay for it. His Majesty is giving us a bit of relief.
I was unable to post it in NEWS on QL :(
http://news.bbc.co.uk/1/hi/business/7455570.stm
Saudi Arabia will increase its oil production by 200,000 barrels a day next month in a move to meet growing world demand, the United Nations says.
The news was announced after UN Secretary General Ban Ki-Moon met Saudi Oil Minister Ali al-Naimi in Jeddah for talks on the high oil price.
Last month, the Kingdom increased its production by 300,000 barrels a day.
The country is thought to be the only oil producer with the ability to pump substantially more crude.
It argues that the current high prices are caused by speculators rather than any shortage of crude oil.
Oil prices fell by almost $2 on Friday after reports that Saudi Arabia might boost oil production. US light, sweet crude was trading at $134.86 in New York.
'Speculative factors'
After an earlier meeting with the Kingdom's King Abdullah, Mr Ban said Saudi Arabia, the world's biggest oil producer, viewed current prices as "abnormally high".
The price of oil keeps on rising
"He [King Abdullah] acknowledged that the current oil prices are abnormally high due to speculative factors and some other national government policies," Mr Ban said.
"He is willing to what he can to [bring] the price of oil to adequate levels."
On Friday, the Saudi oil minister said current elevated oil prices - which hit a record high of more than $139 (£71) a barrel last week - were unjustified.
Oil minister Ali al-Naimi said a meeting of oil exporters and importers to be held in Jeddah later this month would seek a solution to the unprecedented high prices, the Saudi state news agency said.
The Kingdom is hosting an international gathering of oil producers and consumers in a week's time. "
For Saudi Arabia and other oil producing countries these prices are indeed bad for business.
Economic theory dictates that with prices this high, an extremely large amount of people will seriously reduce the amount of gasoline they buy. The lesser the price the more they buy. It has always been a KSA policy (not sure if OPEC takes the same stand) to keep a barrel of oil around $30 to $50. They make more money than they know what to do with off of those prices and it keeps supply and demand in check.
As the minister rightly says, speculators looking to make a quick easy buck on a commodity are a huge problem. Speculators will purchase LARGE amounts of oil, sit on it to create an inflated price by reduced supply figures. In fact, speculators do this on any commodity they can to make a quick easy buck. Of course there is the risk of loss but in this game they seem to be happy with the risk and aiding in alarming levels of inflation.
Of course as has been mentioned before on this forum the weak American dollar is the other problem in this economic equation. It takes more American dollars to buy a barrel of oil or any other product on the market. The dollar has declined substantial amounts over the past 5 to 6 years. Almost 50% to the Euro!!
The world would do itself a favor by pricing oil in another stable currency like the Euro but this would sink America as a world power and she will give wrath to any nation dong so....
I dont get it,
They produce it,
Is it not them who should determine its price,
OK they say its up to 113...Sell it for 90
What type of evil deal is going on?
Math 4 All