5 Reasons Saudia Arabia Won't (or Can't) Increase Oil Supply

[Chuck]

From http://www.thedailygreen.com/environ...a-oil-47020606

1. Supply Isn't the Problem:Oil prices are due to market speculation, the weak dollar and political strife, not supply. That's Saudi Arabia's, and OPEC's, public line, and it may well be true.
2. It Needs the Cash:Saudi Arabian demographics are shifting such that there's less oil revenue per person (72% less than in 1980) so it has to cash in while the getting is good. That means keeping oil prices as high as possible without triggering a recession that would cut into profits.
3. Iran:Saudi Arabia is scared of fellow OPEC member Iran, and doesn't want to annoy Iran's leadership, which opposes any supply increase.
4. The Future is Green:The talk in the industrialized world is about going green, going energy independent and doing something about global warming – none of which bode well for the future of oil. Saudi Arabia may want to cash in while it still can.
5. Peak Oil: Saudi Arabia may have hit its own personal peak oil, which would likely mean the world has too. In other words, it may be pumping as much cheap easy and profitable oil as it can. Boosting supply, then, would not lower the world price or boost its profits since whatever new oil it could pump would be extracted at a greater price. The authors point out that the Energy Information Administration has lowered its expectations for Saudi Arabian oil output in 2010 by 22%.

[mparrish]

An old article I came across again. Worth a read.

http://www.washingtonmonthly.com/fea...0506.drum.html

[ILAveo]

Originally Posted by mparrish

An old article I came across again. Worth a read.

http://www.washingtonmonthly.com/fea...0506.drum.html

I read until I came to:

"To begin with, oil is found only in certain specific types of geological formations, and we already know where they all are."

which led me to conclude the author doesn't know what he's talking about. The guy might make some good points, but once I catch a whopper like that I get distracted.

[hobbit]

How about "they need to fund the contining buildup of that
idiotic fantasyland that Dubai has become"? Let's remember
that Vegas and all its glitter was funded by the "stupidity tax"
that far too many people were far too willing to pay.
.
_H*