“Arab News reports that the Saudi government, and an array of economists, are concerned that high oil prices could knock the legs out from under a recovering global economy. It quotes both the head of Saudi ARAMCO and the Minister of Petroleum & Minerals and repeats allegations that speculation, not supply and demand, are behind current prices; demand is low, they say, and the market is oversupplied. Saudi Arabia does not set oil prices. It does, through its membership in OPEC, play a role in determining output. But unless OPEC were to flood the market with oil, I don’t see how OPEC could drive oil prices down. OPEC is not going to do that as ‘hawkish’ countries like Venezuela and Iran want every penny of profit they can find as their own economies are under stress.
Of interest, the article also says that two-thirds of Saudi oil production is now going to Asia.”
No comments:
Post a Comment