Saudi Arabia rescue America and Britain yet again!

Society Pakistan & World Affairs
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Chancellor Gordon Brown of the UK was expected to join the finance ministers of the G8 group of leading industrialised nations today to call for an increase in world oil production.

With oil prices at a 21-year high, the G8 ministers, meeting in New York, were expected to urge the Opec cartel of oil producing countries to take action to lower the cost of crude.

Mr Brown has warned that measures to ease the pressure on prices, which have topped 40-dollars-a-barrel, are “crucial” for the stability and prosperity of the world economy.

**US STOCKS rose yesterday , after Saudi Arabia’s call for increased oil production drove crude prices below $40 a barrel and eased worries that soaring energy costs could derail the recovering US economy. **

Opec, which is also meeting this weekend in Amsterdam, has said that as prices are being driven to a large extent by security concerns over the Middle East, a rise in production will not necessarily bring down prices.
Britain calls for more oil

WASHINGTON (Reuters) -** America on Friday welcomed Saudi Arabia’s proposal to raise oil output by 2 million barrels a day and said it was good news for the U.S. economy. **
“It’s welcome news. It’s overdue news and it’s welcome news,” Treasury Secretary John Snow told Fox News television.

Oil recently touched a 21-year trading high above $41 a barrel and Snow said this was “not helpful to this recovery.” But he also reiterated that America’s strategic oil stockpile would not be tapped to help peg back prices.

US welcome Saudi helping handon oil!

With the onslaught of America on Iraq and the Israelis onslaught on the palestinians what on earth are the Saudis playing at. They have provided bases and finances for America and Britian to launch bombing raids and invasions of iraq for past 12 years + and also rescuing the economies of these 2 countries when they in trouble by increasing Black gold (oil) production. It is clear to anyone where Saudis loyalty lies and its not with the ummah!

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saudi governement is like a sheep for americans....when will these sheikhs and governments will realise abt the clevernes of isreal americans britishers ..

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So has the crude oil price fallen below $40 dollars a barrel after the Saudi proposal to increase output?

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$41.40 today. It will take a little time to restore prices to somewhere near the 30-35 dollar mark. I think most of the other OPEC nations are producing to capacity as it is so will have little effect. Saudi is going alone in this last I read the rest said a wait and see policy was best.

The US reassessed their stocked reserves and they were slightly higher than they originally though ~700 000 bls.

Brent crude in the UK is at somewhere near the 37 dollar mark, probably offset by North Sea increased production.

If think this will be an increasing trend and Saudi although having the reserves will not have the production capacity to iron out any further blips on the line in future.

Countries like Iraq and Central asian states really need to be brought online to help out and keep prices down and production up....enter the war on terror.

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[QUOTE]
Originally posted by Thap: *
**Countries like Iraq and Central asian states really need to be brought online to help out and keep prices down and production up....enter the war on terror.*
[/QUOTE]

Very informative reply. Obviously Iraq and the CAR's are vital for the United States and it's future prosperity, especially in maintaining stable energy prices?

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Is the rest of OPEC resisting Saudi proposal bcz they can't raise their production or because they like higher prices (or both)?

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Well Faisal there are official lines then obvious ones.

It's a mixture of not wanting to yield to pressure, the Saudis are really the cheif whips in OPEC and often find things don't go as smoothly as they like. Also the high price is great for the coffers, also most are producing to near capacity as it is any further increase will be costly and deplete reserve rates and weaken long term economic prospects for them.

The incentive for OPEC is always the sustained profits from a controlled price for the short and long term, but short term booms often have to be fought back for long term goals. This is usually the Saudi position, having the longest term considerations of all OPEC and the reserve and production capacity to dictate terms to the rest.

Production will go up across the board no doubt, but this has always been the point in US foreign policy, this unpredictability of OPEC nation and other oil exporter nations politics, a controlled reserve and production operation focused on the long term US needs has always been a driving force for the economy.

As I stated earlier Iraq and the CAS would be an ideal asset to control and nurture to try and offset OPEC or indeed influence it.

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Well, lest the conspiracy theorists get carried away, both OPEC and non-OPEC producers alike are salivating at the thought of $40 per barrel oil. At $40 per barrel you are going to get a lot of rigs working, a lot of new exploration and a lot of reinvestment. The economies of OPEC countries will be rejuvenated with prices this high. Let us not forget the possibilities of Lybian oil reinvestment. They have had very little reinvestment, and the condition of thier fields has decayed somewhat.

Prices are probably within a month of peaking, but $32 to $35 per barrel would do a lot to stimulate production. The other component is that oil prices are dollar denominated, so as the dollar falls, oil prices rise. Since the dollar has been quietly encouraged to fall, to boost US overseas sales, oil prices rise. Lately however other commodity prices such as copper and aluminum have peaked and started to drop as the Chinese work to reign in thier booming economy.

Saudi not only has the swing production capability, they also have the most credible voice in OPEC. Why would they not want to open up the flow when oil prices are nearly twice what they were three years ago? They know how to ring the register when prices are high.... It is self interest that will have the Saudi's opening up the flow. Countries like China and India also have newfound dollar reserves, and are starting thier own strategic petroleum reserves with excess dollars.

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OG,

ONGC is spending a lot of it's free cash, of which it has a considerable amount unlike some of the majors on new exploration further afield from India to ensure a reserves base in its portfolio. The strategic oil reserve in reality for China and India are some time off yet.

Chinese companies are eyeing east africa with great interest and already have considerable stakes in many concessions. Both countries are taking the state run and private company approach to ensure revenue to buy from the nearest market.

It's no secret and certainly no conspiracy theory that controlling an asset such as this is paramount in US foreign policy it is niave to think otherwise, with 25% of the worlds consumption on their books and an ever increasing Chinese demand on the horizon.

The Saudi's will always make money from the oil no matter what the price as long as it is above prodcution costs. As soo as they get their gas by wire project completed they will still rake it in at 25 dollars a bbl.

What will be interesting is see Russia taking a more important role in say 20-30 years when LNG really picks up, but of course the Saudi's have the Id El Shargi fand multi hundred TCF's in one field!! They can't lose.

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Its ironic the americans and britain complaining about oil prices when they put taxes on the oil to there own consumers which is 50% of the cost of basic gallon of oil, if you wanna cut prices start at home with the taxes, your getting raw black gold for less than the price of mineral water.

Saudi is always looking out for amerikka this is clear the realtionship is based on benefit for both. Unfortunatly the saudis and others do not use this oil as cleverly as they should.

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AK 47,

Somehow you equate the Saudi’s desire to have a stable world economy with some sort of servitude to the US. The Saudis may be repressive ba$tards to their people, but they ar grown ups is a group of largely erratic countries. Without them, OPEC would be meaningless.

The EU countries certainly have much greater taxation than the US.

Control of Iraqi oil is not the US goal. Stable responsible use of the oil wealth is. When all of the oil wealth is used for the decadence of Saddam and his sons, or spent on a less than successful war machine, then the people of Iraq are not benefitting from their wealth. Since 1984 Iraq has been a debtor country despite its’ oil. There was no proper stewardship there. Iraq is still facing massive capital expenditures to upgrade it’s oil field technology as the Saudi’s have.

The East is far more concerned and dependent on middle east oil that the US is. And, I am not entirely sure that the Saudi’s will be in the drivers seat in the near future. Read the Simmons presentation below:
http://csis.org/energy/040224_transcript.pdf

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Saudis royals can go to hell they worse than amerikkan government!

This thread is about saudi yet again coming to the rescue of western economies, at a time when muslims are under attack if saudis had any sense of loyalty to the ummah why would they do such a thing as cut the price of oil just because Bush and Co said so! The saudi regime are politically so backwards they act like a bunch of schoolkids who need advice from Bush and Co on what to do next, this was prime example of how they could have used political leverage but they failed yet again as did the 10`s of arab summits we have all year round!

To capitalists this action by saudis is benefit in terms of money because they measure everything in terms of money, even to the level of basic needs such as water that you drink but to a muslim the money issue is irrelevant when it comes to lives of people being killed in iraq, Saudis neighbour and so called brother nation for example.

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Ak, push oil prices up to far and you'll see Americans demand that the U.S. quit it's dirty oil addiction and find an alternative fuel, the Sauds don't want that.

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American brigade

just as an example to hit home, McDonalds, Pizza Hut, KFC and Nike who all operate in Muslim countries. Such companies charge the same price for their goods wherever they operate, which in some Muslim countries can be the average monthly wage!

Could anyone imagine these western companies forsaking their profits to ease the economic strain in the Muslim lands? Obviously not

But when shoe is on other foot oh we must all bring down oil prices all off a sudden

Americans and western countries always want the whole cake, hypocrisy yet again why are you people so blind to the obvious contradictions in your policies every time!

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Big Mac prices and what not are adjusted on a number of variables throughout the world ak47.

Big Macs are 34% cheaper in Pakistan than the U.S.
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Attacking compounds where innocent people live isn't the answer in dealing with the Saudi - U.S. relationship.

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When ethenol production through corn crops is concidered more important than food production…

Civilisation is doomed.

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[QUOTE]
*Originally posted by underthedome: *
Big Mac prices and what not are adjusted on a number of variables throughout the world ak47.

Big Macs are 34% cheaper in Pakistan than the U.S.
..............................

Attacking compounds where innocent people live isn't the answer in dealing with the Saudi - U.S. relationship.
[/QUOTE]

Very funny your 1 single example would have some credibility if where not for the fact US has average annual salary of around $40,000 and pakistan has average annual salary around the $2000 mark.

As for Saudis and innoncent lives thats a bit rich,i think you should look at what your beloved country america is doing killing 11000 innocent iraqis is not exactly good is it, and it does`nt help matters when amerikkka hijacks a whole country and its people in Iraq!

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Oil prices up!

The concerns come amid warnings that another attack on Saudi Arabia, the world’s major oil supplier, is imminent.

Petrol is set to rise 20 per cent to 92p a litre following the weekend slaughter of 22 people in al-Khobar if, as expected, oil prices rise from $40 to $50 a barrel.

UK Chancellor Gordon Brown was urged yesterday to scrap plans for a 2p rise in fuel duty, planned for September, to ease pressure on motorists and transport operators.

But experts believe prices could spiral out of control if terrorists interrupt oil supplies leading to fears of a world energy crisis, global slump, tumbling house prices and a collapse in consumer confidence.

Justin Urquhart Stewart, of Seven Investment Management, has “no doubt” that fuel prices could hit $100 a barrel, equal to about £8 a gallon of petrol. **He said yesterday: "Terrorists have found the weak spot in the lifeline of Western capitalist states.

"Just a few more events in Saudi could cause very significant problems.

“It would take remarkably little to cause a destabilisation here in the UK, let alone on a global level. We’re not just talking about the impact on oil prices, but investment and job creation. It’s a nasty-looking recipe.”**

A surge in the price of oil will renew fears of a world energy crisis not seen since the dark days of the early 70s.

State oil giant Saudi Aramco has vowed to keep its crude supplies flowing smoothly in a bid to stop prices soaring out of control.

Saudi Attacks sends jitters to the Western economies

Hmmm lifeline of the west, and all these american right wingers say we dont need your oil, ok fine dont have it have your cow dung alternatives or whatever you want to use. Get out of middle east you will do us all a favour!