Thursday, December 11, 2008
Saudis Signal Deeper Oil Output Cuts Than Expected
There's a limit to what the Saudis and Opec can produce, but they have a lot of room to cut production and that's exactly what they are doing.
“The Saudis might have been impatient with the market’s skepticism, so they’ve decided some transparency is needed,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “It shows they’re deadly serious about cutting already and serious about cutting more.”
Expect to see inventory overhangs reduced--even in this weak, global economy--and prices will rise again.
Read article here.
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4 comments:
This is the inflation everybody is warning about.
Saudi's realize that the dollar is stronger - they can produce less and make about the same amount of money.
If the Euro has fallen 20% then the Saudi's can work less and get the same amount of money in terms of a strong dollar.
As the dollar weakens they will have to increase production to keep up with general vanilla inflation.
The dollar is still coupled to oil.
The time for green is better than ever.
Oil is subsidized in Venezuela and Indonesia. It is a like a free web browser.
Yes, but higher oil prices will bring a lower dollar. That is the tradeoff. Not sure the Saudis understand that. Most of the world doesn't. They think the relationship is the inverse.
no sure.
they probably are very well funded and hedged.
therefore, they bought a lot of Euros on the recent slide and are going to ride the next slide Back to a low dollar and high euro and watch their profits soar.
technically they cannot earn interest in bank accounts but they can manipulate oil.
is there a transparent window anywhere showing which entities sold off their expensive Euros and Quids and bought dollars before the recent run to the dollar ?
while same forex swapper reversed their position and got back into cheap Euros with the strong dollars they accumulated ?
US Federal Government ?
UK ?
Saudi ?
Any data ?
Why did UK know to sell off their steel industry recently ( Corus with debt on books ) to India
and then Landrover ( with debt again ) to India ---- just before the fan fell off ?
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