Saudi says there is no shortfall; excess oil already sloshing around
This is different than what was said during the Libyan ruckus
Updates
This is different than what was said during the Libyan ruckus
Updates
May 20, 2012: Saudi production --
From a March, 2012 article:Moments later: moments after posting the story below, I saw this op-ed by Saudi Arabia's oil minister Ali al-Naimi. The Saudi Minister says here is plenty of oil sloshing around. So why the high price? I don't know, and I don't think anyone else does either. I think part of it has to do with "just-in-time" delivery. Plenty of oil can be sloshing around, but countries are bidding for it as their supplies from Iran are shut off. For all I know Saudi is holding oil in tankers off-shore waiting for a higher bid. Elsewhere I've read there is an excess of ocean-going tankers and it's actually fairly inexpensive to "store" oil offshore. Again, I have no idea. But if there is plenty of oil sloshing around offshore and yet the price of oil is "ridiculously high" there has to be a reason.
Saudi Arabia increased production to 10.047 million barrels a day in November, the highest in at least three decades. The kingdom, the world’s biggest crude exporter, has the capacity to produce 12.5 million barrels a day and will pump about 9.9 million barrels a day this month and in April, al-Naimi told reporters at the Ritz Carlton hotel in the Qatari capital. [In this article, Saudi says it can increase production 25% if necessary.]From a May 20, 2012, article:
Saudi Arabia, OPEC’s largest producer, increased daily output to 9.923 million barrels in March, up 0.7 percent to the second-highest level since at least 1980, according to the initiative.
The price of WTI dropped a couple of bucks today on rumors that the western nations were getting ready to release emergency supplies. The $2 drop was similar to the drop that we saw the day it was first reported that Great Britain and the US had agreed to release emergency oil supplies. When the report was realized to be "premature," the price went back up. A $2 drop in the price of WTI from $107 to $105 is not going to lower the price of gasoline very much at the pump. The risk here for politicians is that if the release of emergency supplies fails to do much at the pump, there is no Plan B.
Original Post
Link to Yahoo News. Saudi Arabian Oil Minister Ali al-Naimi mounted his most direct rhetorical attack against high oil prices on Wednesday, but showed no sign of moving to increase supplies even as France joined the United States and Britain in talks for a release of strategic reserves. [Interesting, huh?]
Two weeks after Reuters initially reported that Britain and the United States were set to agree on tapping emergency stockpiles, French Energy Minister Eric Besson said the European nation was also in talks with Washington. Le Monde reported that the move could come in a matter of weeks. [Trial balloon: be prepared for release of oil from SPR. It's interesting that there is not a shortage of oil.]At the same time, the Financial Times published a rare opinion piece by the head of the world's largest crude oil exporter, who said a feared shortage of oil supplies was a "myth" but reiterated that Saudi Arabia was ready, able and willing to meet any gap in supplies.
The moves emphasized the growing concern from both sides of the market -- producers and consumers -- about the economic and political impact of the 15 percent jump in oil prices this year. But it also highlighted the different responses they are taking.
As I've said many, many times before, I have yet to see evidence that Saudi has the will power and/or ability to increase oil production to affect oil prices in the short term.
