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Analysis: Saudis protect own interests in oil production
H. Josef Hebert, Associated Press
When President Bush, once a Texas oilman, asked Saudi Arabia to pump more crude, he may have forgotten that the Saudis have a long memory. And that made it a good bet his mission this past week would produce a dry hole.
In the 1990s the OPEC cartel was eager to pump more oil in a grab for cash as prices – like today – were going up, passing what then was viewed as a healthy sum in the $20-plus range. But then the Asia economic crisis struck and oil prices plummeted to below $10 a barrel.
Saudi Arabia and other producers got burned.
“They remember that and they’re not going have that happen again,” says Robert Ebel, an international energy expert at the Center for Strategic and International Studies. “They understand the market just as well as we do.”
(17 May 2008)
Goldman sees oil averaging $141 in second half
Steve Gelsi, MarketWatch
Goldman Sachs once again issued a provocative forecast for the price of crude oil Friday, saying a barrel is likely to average $141 over the second half of the year — a further 10% or so above the latest in what’s been a string of record highs.
Making their projection on the same day that Saudi Arabia — the world’s biggest oil producer — declined to raise output and that crude futures crested near $128 a barrel for the first time, Goldman commodities analysts Jeffrey Currie, Giovanni Serio, David Greely, Allison Nathan and Samantha Dart said the oil market appears to be in the midst of a historic repricing.
(16 May 2008)
Want Cheaper Gas and Oil? End the Damned Wars!
Dave Lindorff, Common Dreams
… One analyst, economist Ismael Hussein-Zadeh, a professor of economics at Drake University in Des Moines, Iowa, has a different explanation for the price rise, and American motorists and homeowners should pay close attention.
“Oil prices have gone from the mid $20 range in the fall of 2002 to $127 yesterday – a rise of $100/barrel in just over five years,” he says. “And the bulk of that increase can be attributed to the US wars in Iraq and Afghanistan, and to the threats of war against Iran.”
Hussein-Zadeh’s analysis looks at a number of ways that the Bush/Cheney wars have contributed to rising oil prices. Chief among these are two factors: the threat to supplies, particularly from the Persian Gulf region from which 20 percent of the world’s oil supplies come, and a falling dollar, because oil is priced in dollars, and as it loses value, oil producing countries raise their prices to compensate.
In an article titled “Worried About the Price of Gas? End US Wars,” Hussein-Zadeh writes, “Soon after the invasions of Afghanistan and Iraq the price of oil began to escalate in tandem with the escalation of war and political turbulence in the Middle East.” Furthermore, he says, “Anytime there is a renewed US military threat against Iran, fuel prices move up several notches.” If the US were to actually make good on Bush’s and Cheney’s threats to attack Iran, in Hussein-Zadeh’s view “the sky would be the limit” to oil prices, with $200/barrel being a starting point.
(17 May 2008)
