Saudi Arabia will act to lower soaring oil prices - News and Current Events | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

Saudi Arabia will act to lower soaring oil prices
Started:March 28th, 2012 (07:29 PM) by kbit Views / Replies:173 / 0
Last Reply:March 28th, 2012 (07:29 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Saudi Arabia will act to lower soaring oil prices

Old March 28th, 2012, 07:29 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

Saudi Arabia will act to lower soaring oil prices

High international oil prices are bad news. Bad for Europe, bad for the US, bad for emerging economies and bad for the world’s poorest nations. A period of prolonged high prices is bad for all oil producing nations, including Saudi Arabia, and they are bad news for the energy industry more widely.

It is clear that sustained high prices are starting to take their toll on European economic growth targets.

They are contributing to trade balance deficits and feeding inflationary pressures. It is an unsatisfactory situation and one Saudi Arabia is keen to help address. In an interconnected world, European economic growth is in our national interest. No one benefits from a stagnating European economy and we want to do what we can to help encourage growth.

Needless to say, Saudi Arabia does not control the price; it sells its crude oil according to international prices. But it remains the world’s largest producer, and the country with the greatest proven reserves, so it has a responsibility to do what it can to mitigate prices.

The bottom line is that Saudi Arabia would like to see a lower price. It would like to see a fair and reasonable price that will not hurt the global economic recovery, especially in emerging and developing countries, that will generate a good return for producing nations, and that will attract greater investment in the oil industry.

It is clear that geopolitical tensions in the region, and concerns over supply, are helping to keep prices high.
Yet fundamentally the market remains balanced. It is the perceived potential shortage of oil keeping prices high – not the reality on the ground. There is no lack of supply. There is no demand which cannot be met. Total commercial stocks for OECD nations are within target, and there is at least 57 days forward cover, enough to handle almost any eventuality.

So what can Saudi Arabia actually do?

We want to correct the myth that there is, or could be, a shortage. It is an irrational fear, a fear without basis. Saudi Arabia’s current capacity is 12.5m barrels per day, way beyond current levels demanded, and a reliable buffer against any temporary loss of production. Saudi Arabia has invested a great deal to sustain its capacity, and it will use spare production capacity to supply the oil market with any additional required volumes.

This is not empty rhetoric. We have proved to be a reliable supplier many times in the past. We increased production following the invasion of Iraq. We increased production following a workers’ strike in Venezuela in 2002. We stepped in following a surge in demand from emerging economies, specifically China, in 2004. We increased supplies to the US in the wake of Hurricane Katrina. And when a popular uprising swept through Libya in early 2011, we stepped up production to offset any losses.

We have done it many times before, we will do it again.

The other, sometimes overlooked, fact is that Saudi Arabia’s crude oil is suitable, and acceptable, for most global refineries. We are also uniquely capable of supplying volume when and where it is needed thanks to multiple delivery points, our strong marketing capabilities and ample storage – inside the Kingdom and in other parts of the world, especially the Mediterranean, northern Europe and Asia.

For the record, as things stand today, our inventories in Saudi Arabia and around the world are full. Our Rotterdam inventory is full, our Sidi Kerir facility is full, our Okinawa facility is full – 100 per cent full.

It should also be noted how other Opec members, such as Libya, Iraq and Angola, have also taken positive strides forward in increasing output and they are well poised for further advances. If you look towards Canada and the US, these nations are increasing oil production this year and beyond, and further supplies are being contributed from Russia, South America, Kazakhstan and Azerbaijan.

So the story is one of plenty. Supply is not the problem, and it has not been a problem in the recent past. There is no rational reason why oil prices are continuing to remain at these high levels.
I hope by speaking out on the issue that our intentions – and capabilities – are clear. We want to see stronger European growth and realise that reasonable crude oil prices are key to this.

Over the past 200 years, oil has powered incredible, and unprecedented, economic and social progress in Europe and the wider world. It has transformed our lives and will continue to power the global economy for many decades to come. It will only do so if prices reach a more reasonable level – so it is in all our interests to do what we can to achieve this aim.

Saudi Arabia will act to lower soaring oil prices -

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > Saudi Arabia will act to lower soaring oil prices

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

An Afternoon with FIO trader bobwest

Elite only

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
Why Saudi and US Attempts to Influence Oil Prices are Ineffective kbit News and Current Events 0 March 27th, 2012 03:35 PM
Venezuela Says Oil Reserves Surpass Saudi Arabia's Quick Summary News and Current Events 5 July 18th, 2011 02:35 PM
Tapping Oil Reserve Still Won't Lower Gas Prices Below $3 Quick Summary News and Current Events 0 June 23rd, 2011 03:10 PM
Saudi Arabia to Push OPEC to Lift Oil Output, Cut Prices Quick Summary News and Current Events 0 June 5th, 2011 10:30 PM
Saudi Arabia Sees Need to Pump More Oil Quick Summary News and Current Events 0 April 22nd, 2011 07:20 AM

All times are GMT -4. The time now is 09:50 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-25 in 0.09 seconds with 19 queries on phoenix via your IP