Saudi Arabia

Increasing oil production will not substitute as energy solution

Originally posted on the NDN Blog.

Yesterday, Saudi Arabia did what everyone -- including George W. Bush on bended knee -- has been asking it to do for months: agree to increase production. Prices closed up a dollar. The Saudi move and its non-impact on the market shows just how tight supplies remain. While it was designed in large part to offset declines in Nigerian production due to rebel violence in the oil-rich, poverty-stricken Niger Delta, it might have sent a psychological signal of easing supplies but it did not.

Meanwhile, back in Washington, another panel of oil traders told Chair Dingell's House Energy and Commerce Oversight subcommittee that speculation is driving up oil prices and tighter oversight of commodities futures markets could lower prices. Staffers released data to the effect that 70 percent of trades are now speculative, up from 30 percent not long ago.

Saudis agree with McCain: Cut gasoline taxes!

If anything should put a stake through John McCain's absurd gas tax holiday idea, it's that the Saudi King advocates it, too!

As I have previously noted, the only ones who benefit from the gas tax are the oil companies and the petroleum producers. Case in point, the biggest producer just said:

Next month, the Saudis will be pumping an extra half-a-million barrels of oil a day compared to last month, bringing total Saudi production to 9.7 million barrels a day, their highest ever level. But the world's biggest oil exporters are coupling the increase with an appeal to western Europe to cut fuel taxes to lower the price of petrol to consumers.

Why do they want the West to lower fuel taxes? They want to be able to raise their own prices and/or they want higher demand for their primary product.

Saudi Arabia and oil

I recently found a pretty good NYT Magazine article on oil production. It's definitely worth a read, if for no other reason than as a reminder of how much things have changed since the article was written in 2005. For example, on page 1 comes the quaint statement:

If consumption begins to exceed production by even a small amount, the price of a barrel of oil could soar to triple-digit levels.

Yes ... yes it could. Here's another one:

Sighted in a Saudia Arabian zoo

I interrupt my reporting from Iowa to pass on this curio I found on the blog of my old friend Angelo Young, who works in Saudi Arabia and writes bemused, funny missives from the global crude-oil capital. In this one, he reports a strange sight in a Jeddah zoo: “This Lebanese guy handed the monkey […]