Fuel Fix: Saudi Arabia’s solution to global oil glut: Pump even more crude
Saudi Arabia has a response to the global surplus of oil: Raise output to near-record levels and then pump even more.
The world’s biggest oil exporter, having abandoned last year its role of keeping global markets in balance, now has incentive to maximize output and undermine rival producers by using its reserve capacity, according to Citigroup Inc. and UBS AG. Just meeting its own domestic demand this summer will require a lot more fuel, others estimate.
The increase — a snub to fellow OPEC members calling on the kingdom to cut production — will heighten tensions when the organization meets in June. Oil plunged to a six-year low near $45 a barrel in January, six weeks after the Saudis overcame opposition within the group to keep up output despite surging U.S. shale supplies.
WNU Editor: I do not know how long this will continue .... but it looks like the Saudis don't care. For countries like Venezuela .... this is a disaster.
1 comment:
This will hurt Venezuela, but they have Hezbollah training camps and weekly flights from Tehran.
So this is a win for the Saudis.
Jacking around prices like this also hurts the Saudis, but they figure they have the stamina or intelligence fo r the game.
It is a little like the game Kerplunk
Every move you make brings you closer to disaster, but you hope your carefully studied moves brings your opponents to grief 1st.
Playing chicken with and industrial sectors and the overall national and world GDP.
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