Saturday, May 17, 2008

Price of Oil

So.... ABC News did a story last night... where they said Bush asked Saudi Arabia to increase oil production to lessen the burden on American pocket books ($125+ per barrel of crude oil).... It was $27/barrel back in 2000 when Bush was running for President. What got me was they said two things... one a quote from Saudi Oil Minister.... Mr. Naimi said. “We supplied, to the tune of an additional 300,000 barrels per day, from 1.4 to 1.7 million barrels per day, for our customers in the U.S. So how much more can we do?”

Then they showed an Oil Anlaysts that said it was just a drop in the bucket. I was like, "huh?" that's like 20% increase in production. Turns out... after digging... that that 1.4 is how much oil the US was purchasing from Saudi Arabia and we will now be purchasing 1.7MM... and they produce 9.4M a day. I don't know why the ABC News areticle and the NY Times article above couldn't publish that.... they really didn't look very intelligent saying a 20% increase in production of oil sold to the U.S by Saudia Arabia is not significant, sounds significant to me--until I factor in the goal is to get them to produce enough to lower prices (people say a 1MM increase in production should lower prices about $0.60)... what a fascinating look into supply/demand and the pain people feel, or the gains others feel.

"Bush's national security adviser, said Saudi Oil Minister Ali al-Naimi reiterated his pledge to give customers all the oil they want."

One piece I didn't research was the inventory levels. Saudi inventory would be interesting to know... from a quick dirty Google search--I'd guess they don't hold inventory... why bother. Just sell what you produce, and produce what you sell. What about Iraq coming online to produce oil, where is that at? How 'bout these speculators at Goldman Sachs...

Iraq oil production, could reach 3MM bpd this year...

Ok.... all that said... this makes my heart break for the world turmoil over oil.

How 'bout this for an answer.... (ok it is expensive!) how bout these links...

We are getting close!

No comments: