Tuesday, March 20, 2012

Saudi Arabia sends tankers to US with pledge to bring down oil price

Story at The Telegraph.
Saudi Arabia has pledged to take action to lower the high price of oil, which has risen to around $125 a barrel, with laden supertankers set to arrive in the US in the coming weeks.
Did anyone think to ask for what price did they sell all of this oil? Is this another case of a moron monopolist trying to effect the price level via quantity supplied or demanded and not directly setting the price itself?


mike norman said...

Didn't the Saudi oil minister recently say, "We can't just dump oil onto the market." So are they now planning to just dump oil onto the market? This is just a silly political show. The Saudis could bring prices down immediately by CUTTING THEIR PRICE. Parking tankers offshore. Ridiculous. Watch crude rally.

Matt Franko said...

Mike someone just said that on the radio here as they think "the market" may look at this as a "desperation move" by TPTB... crazy!


Leverage said...

Oh my... rise damn margin rates and crash the market.

Futures oil market is a joke, speculative position are an all-time high, hedgers are selling like mad to cover all their production until a lot of years from now.

But they won't because again that would ruin stupid investment banks gambling public money (and by that I mean all the money they create out of nothing thanks to central banks covering their insolvency) and counterparty risk is high.

Tired of this game, always comes to an stupid suit nut in an office in some stupid bank stealing purchasing power from the rest of us.

i'm sorry for the honest people working on finance, but it has been ages since that 'industry' has added value instead of destroying real capital and wealth or plainly steal it. And it's sad being a market participant tbh.

beowulf said...

Listened to a radio interview with Jim Norman (author of "The Oil Card") the other day, fascinating stuff.

Anyway, his theory is that the US Govt (and its Saudi allies) lets speculators jack up the price of oil for a simple reason-- to hammer China. By contrast, prices for natural gas, which powers US industry, continues to fall.

Behind the scenes, says Jim Norman, Russia is on the same page wih us because their economy would collapse if oil prices plunged- as it did right before the Soviet Union collapsed. So the US and the Saudis push up oil prices when they want to punch China, and they let it drop when they want to punch Russia.
This actually would make sense if we offset the cost to households of higher energy prices with a negative income tax system. Since we don't, as ingenious as his theory is, its hard to imagine politicians would spike their own poll numbers for such a deep game.

Ryan Harris said...

Good way to raise the price of storage and transport at the gulf terminals

AndyCFC said...

some intresting stuff from Chris Cook here (as is usual from him)


Sorry Tom meant to send this to you yesterday but got tied up.

mike norman said...

What's interesting is that the soon to be finished pipeline from Cushing, OK to the Gulf Coast could alleviate the huge price disparity between Brent and WTI. Could be one helluva trading opportunity. That spread could narrow dramatically and even converge. Hmmmm.