Strongest Words Yet;
Guaranteeing Price Is Not Going Up Anytime Soon
Saudi Oil Minister Ali
al-Naimi told reporters on Sunday that Saudi Arabia will not cut its oil
production to stabilize prices.
“If (non-OPEC producers)
want to cut production, they are welcome. We are not going to cut, certainly
Saudi Arabia is not going to cut,” said Naimi. He added that his country was
“100 percent” not pleased with current prices, but they would improve, although
unclear when. (Reuters/zerohedge, 21 December)
Naimi’s remarks, made on
the sideline of a conference in Abu Dhabi, and echoed by UAE and Kuwait’s oil
ministers, were the strongest signal yet that the kingdom will not cut the
output to prop up oil prices, even if non-OPEC countries do, and will instead
attempt to ride the market’s biggest slump in years. Those strong words would
almost certainly guarantee that the price of crude is not going up anytime
soon.
The crude supply is set to
rise even further, with the U.S. output poised to hit a 42-year (if not
historical) high in 2015. (zerohedge, 21 December)
At the same time global
demand for oil will tumble due to slowing down in the growth of the Chinese
economy, and with Japan and Europe facing a recession.
“The world is forecast to
need less OPEC oil in 2015 because of a rising supply of U.S. shale oil and
other competing sources, with no significant increase in world demand growth,” Reuters, quoting experts, reported today.
Photo credit: Saudi Oil Minister Ali al-Naimi (Reuters)
Photo credit: Saudi Oil Minister Ali al-Naimi (Reuters)
2 comments:
for the economies of most of the nations of the world a couple of years of cheap oil will be very beneficial. for the economies of Russia, Venezuela and Iran it will be disastrous.
there's very little downside.
Prince Bandar during his last visit to Moscow proposed that Russia abandon Assad and Iran in exchange that the SA will buy Russian weaponry and that the SA will guarantee price of oil for the long future.
One can assume that he also might suggest, there will be something else if you don't accept our proposals......
So today Russia and the Islamic Republic are facing that "....or something else..." situation.
A-F
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