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Economy

Saudi says $100 per barrel 'great price' for oil

2012-05-14

[Dawn]

Top crude exporter Soddy Arabia
...a kingdom taking up the bulk of the Arabian peninsula. Its primary economic activity involves exporting oil and soaking Islamic rubes on the annual hajj pilgrimage. The country supports a large number of princes in whatcha might call princely splendor. When the oil runs out the rest of the world is going to kick sand in their national face...
wants an oil price of around $100 a barrel and would like to see global inventories rise before demand picks up in the second half of the year, Oil Minister Ali al-Naimi said on Sunday.

International Brent crude settled at $112.26 on Friday, well off a peak of over $128 in March. Brent has mostly traded above $100 since early 2011, keeping fuel costs high and threatening to damage a fragile global economy.

"We want a price around $100, that's what we want," Naimi told news hounds ahead of an industry event in Australia. "A $100 price is great."

Saudi Arabia is working at bringing Brent crude prices to that level, he added. The kingdom, OPEC's biggest producer, said it pumped 10.1 million bpd in April, its highest for more than 30 years, as it bid to meet growing demand and curb oil prices.

Prices have stayed high in 2012 due to concern about disruption to global supply from US and European sanctions aimed at hurting Iran's crude export revenues and forcing Tehran to halt its nuclear programme.

Naimi said last week that producers were pumping enough to deal with the impact of the sanctions on the oil market.

He reiterated on Sunday that producers were pumping 1.3 million barrels per day (bpd) to 1.5 million bpd above demand, which is helping to build inventory.

"That should give comfort to consumers," he said.

Posted by:Fred

#11 All oilmen probably understand that at $200 per barrel, CNG becomes the automobile fuel of choice, nuking oil demand and then some. As an automotive fuel, CNG's GGE measure is 1/4 less efficient than gasoline. In other words, GGE to gasoline parity at a current gasoline price of $3.50 (corresponding to $112 Brent crude) would mean a GGE price of $2.60 (meaning a home natural gas price of $1.80/therm). Home natural gas prices are now $1/therm, including delivery charges. Bottom line? At $200 per barrel, the gasoline component of oil demand will collapse to nothing.

Posted by: Zhang Fei 2012-05-14 23:20

#10 Sure they do. It makes the math a lot easier. Just add two zeroes to every barrel you sell and you figure out your sales revenues.

Posted by: American Delight 2012-05-14 16:56

#9 Offer $50, watch them panic, all those "Princes" will be cut off flat.

Posted by: Redneck Jim 2012-05-14 15:55

#8 Sure. But they will have used the substantial power they have until then, often to our detriment.

Of course. I would expect we would return the favor in spades. There are organizations that have been keeping score, the databases grow, the drive arrays get bigger.

What amazes me, is there haven't been as many 'accidents' or mysterious deaths as I would expect at this juncture. They'll come though...eventually.

Posted by: Secret Asian Man 2012-05-14 15:52

#7 Sure. But they will have used the substantial power they have until then, often to our detriment.

Posted by: lotp 2012-05-14 13:28

#6 In the meanwhile, however, their oil wealth has bought Harvard and several other major US universities and allows them to manipulate markets and hence political decisions.

And when they are broke, and facing the prospect of eating sand, we can buy those assets back, at a discount of course.

Posted by: Secret Asian Man 2012-05-14 12:26

#5 Ticks. Their time will come.

Posted by: Whiskey Mike 2012-05-14 10:26

#4 In the meanwhile, however, their oil wealth has bought Harvard and several other major US universities and allows them to manipulate markets and hence political decisions

Posted by: lotp 2012-05-14 10:19

#3 I think they realize that $200 a barrel would result in lower revenues. People in some places wouldn't be able to afford petroleum products at $200 a barrel and the reduction in consumption would more than offset the increase in price. At $200/bbl their revenue would likely see a net decline.

What we need to do is just keep burning as much oil as we can now that we know we are awash in oil. Use all of theirs up. Once their oil is gone, they can go back to driving camels from oasis to oasis across the desert.

Posted by: crosspatch 2012-05-14 02:10

#2 $200 per barrel would be even better, for them.

Posted by: Anguper Hupomosing9418 2012-05-14 00:46

#1 "We want a price around $100, that's what we want,"

WE don't care what YOU want Bloodsucker.

Posted by: Redneck Jim 2012-05-14 00:40

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