Abdullah Jum’ah, chief executive of Saudi Aramco, the kingdom’s oil company, said in a closed door meeting with oil ministers and executives in Rome on Sunday that market signals were ’imperfect’ and that there were uncertainties created by the move away from oil, the world’s worsening economic outlook and the recent turbulance in the financial markets, according to one person who took notes at the discussions. This has impacted Saudi Arabia’s view on the profitability of investing billions of additional dollars into its industry at this point, Gulf sources said.
There may be a grain of truth to that, but Jum’ah’s claim that the Saudis don’t need to increase output before 2020 is ridiculous.
But, if oil hits and stays at $150/bbl or more, it may become more feasible to start — slowly — that expansion.
Meanwhile, remember those halcyon, bygone days of cheap $100/bbl oil, just a month or two ago?
Oil hit $117 today.
And, the Saudis Statements like aren’t alone in their stance.
OPEC Secretary-General Abdullah el al-Badri said member states won’t increase output (most of them can’t, anyway), and says this is not a supply problem right now.
To the degree a crappy dollar is involved, he’s right.
Speaking of that, as Iran and Venezuela continue to push for oil to be denominated in euros, will any European Union members start trying to cut side deals?
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