I got a kick out of "anonymous" who wrote (twice) to say that the Saudis would not lie, that their integrity is on the line when talking oil. "Anonymous" suggested Saudi had "a lot of lose" if they misled us on reserves, production, or pricing.
I thought that interesting, that someone would think that the Saudis, unique among the Arab world, would not intentionally mislead the West.
I see today that oil, having already melting up to the $100 figure, then "popping" to $104 (as the AP, or some mainstream media outlet headlined), is now up almost another $2.00 in futures.
The Saudi prince, of course, if anyone needs to be reminded, said on CNBC two weeks ago that Saudi would not let oil go above $100.
And then, quietly, for unknown reasons, it appears Saudi has decreased production / exports this past month. Both stories have been linked several times; so I won't take time to link them again.
I just find it interesting.
The poll is still up on whether Iranian actions in the Mideast will affect the price of oil. I had almost decided to change the poll (but it's a pain to do so) and it looks like the poll remains relevant.
With regard to Saudi and oil: I still maintain that Saudi has pricing power on the upside (can decrease production) but has little or no pricing power on the downside (can no longer flood the petro-market with oil on a dime). And I do feel that the administration missed several opportunities to rein in the price of oil but ideology won the day. And, of course, $105 oil makes renewables look a lot cheaper -- despite the fact the many solar companies are in bankruptcy now and wind energy companies are facing huge challenges (Spain suspended wind energy projects; the Netherlands pulled the plug on offshore wind completely). My hunch is that as long as expensive oil does not result in his losing the election, the president likes to see higher oil prices. In addition to the effect oil prices will have on the renewable energy industry, at some point a windfall profits tax on "Big Oil" will provide additional transfer of wealth for the nation.
Oil could hit $150.00bbl, and $5.00gal gas according to a guest on Bloomberg today with the Iran embargo in place come July.
ReplyDeleteAlready, people are talking about summer 'staycations'.
I'm hoping cooler heads will prevail and this will all take care of itself (keeping oil down around/below $100 and gasoline below $3.50) but maybe I'm too optimistic.
DeleteIf higher oil prices (>$110) and higher gasoline prices (>$4.25) do occur, I don't think we have to go back to previous administrations to blame for these prices. It's been pretty clear this administration set in place the "stuff" needed to send oil prices higher, specifically: a) the Gulf moratorium; b) killing the Keystone XL; c) slow-rolling the oil-and-gas industry with regard to permits; and, d) advocating "Arab Spring" with the overthrow of at least one ally and the resultant mideast tension.