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Analysis: The Saudis vote for Obama
Martin Sieff, United Press International
he U.S. presidential election may have been decided in Riyadh last Friday. U.S. President George W. Bush asked King Abdullah bin Abdelaziz of Saudi Arabia to use his country’s power as the global swing producer of oil to bring down skyrocketing global petroleum prices — and the king said “No.” Since then, global oil prices have soared to an amazing $135 a barrel on Thursday.
Saudi production will rise from its current level of 9.15 million barrels a day to 9.45 million barrels a day next month, Saudi Oil Minister Ali al-Naimi said on May 16. And that will be it. Such a small increase will not significantly affect the current soaring price levels.
Given the way Bush has treated, and continues to treat, the Saudis and their greatest national security concerns, the slap in the face he received from the Saudi monarch should come as no surprise.
(22 May 2008)
Interesting thought. It makes two debatable assumptions:
- That the Saudis are able to increase production significantly.
- That increasing oil production would in fact stop the price rise (OPEC claims it wouldn’t).
-BA
Growing demand in producing countries pushes up the price
Robin Pagnamenta, UK Times
… The growing thirst for oil in China and India is well known. However, this global surge in demand is being led by oil producers that are emerging as significant consumers, too, undermining their capacity to export when global supplies are tightening.
“Consumption is cannibalising their export capacity,” Jeff Rubin, an oil analyst for CIBC World Markets in Toronto, said. Last year the 13 members of Opec, along with the independent producers Russia and Mexico, consumed more than 12million barrels of oil a day – about 60 per cent more than China and more even than Western Europe. Taken as a bloc, these “oil economies” represent the largest oil market in the world after the US.
Oil demand in Iran, for example, has grown at 5 per cent annually for the past five years, the same rate as in China. Saudi Arabia, the world’s largest producer, with more than nine million barrels a day, and the United Arab Emirates are experiencing similar rates of growth.
Mr Rubin said: “As the price of oil goes higher, it only boosts domestic consumption because there are more petrodollars to boost the economy and the local gasoline prices remain low [because of subsidies].”
(23 May 2008)
Indonesia: Thousands protest fuel price plan
The Jakarta Post
Thousands of students across the country took to the streets Monday in opposition to fight the government’s plan to raise fuel prices.
More than 1,000 students from various groups and universities across the country picketed the State Palace in Jakarta to pressure the government to reconsider its fuel policy.
… Demands for [President] Yudhoyono’s resignation also were heard in Yogyakarta, as thousands of students marched to the provincial legislature to seek support for their fight against fuel price increases and for the completion of the reform agenda.
“Raising fuel prices means the government of SBY-JK is breaking its own promise to bring prosperity to the country. We demand they step down if they go ahead with their plan,” rally coordinator Haris said, referring to President Yudhoyono and Vice President Jusuf Kalla.
… Amid noisy student rallies against fuel price increases, housewives in some areas in Bandung lined up to buy kerosene and liquefied petroleum gas. Some of the women said the two commodities had become scarce in the last two weeks, and their prices had doubled.
(22 May 2008)
Contributor Steve Voetsch writes:
As is often the case with the rapid escalation of prices of food and fuel, developing countries are impacted first. Indonesia is a case in point, with riots relating to fuel and food prices (which have large government subsidies) becoming more common.
Indonesia: Big oil firms short on output targets
ka Krismantari, The Jakarta Post
The Directorate General of Oil and Gas announced Wednesday the majority of oil contractors in the country failed to achieve their daily production target in the first four months of this year.
A total of 22 contractors from 37 oil companies operating in the country saw their production reports for the January-April period marked with red, indicating the country’s goal to produce on average 977,000 barrel of oil per day (bpd) was under threat, the directorate said.
… The country’s biggest contributor remains U.S.-based Chevron Pacific Indonesia, which accounts for almost half of national oil output. During the January-April period, Chevron produced an average 414,765 bpd, exceeding its commitment of 408,000 bpd for this year. However, the figure was still lower compared to last year’s period, which saw the company produce 425,478 bpd.
(23 May 2008)
Contributor Steve Voetsch writes:
Like most countries, Indonesia (I have family there and travel there often–so it is of special interest to me) has big goals and plans to increase oil production, but as this article shows, they are having a hard time even maintaining current oil production. This, in spite of record prices for encouragement. Indonesia, an OPEC member, is now a net oil importer.
