Looks like net demand is slowly using up Saudi excess capacity.
But there’s a long way to go.
No telling when they might alter prices- it’s a political decision on their part.
Report is that the Saudis announced that $100 is their equilibrium estimate for a global recovery. So look for the price to rise to at least that when (if) things are good again.
strawberry picker Reply:August 2nd, 2010 at 1:55 pm
Tom this weekend on Puplava’s show some energy analysts were talking about how brazil has the latest oil extraction technology and infrastructure and the middle east has lots of rusty worn out old oil infrastructure. What are the facts? I find it hard to believe the Saudi’s are sitting on a rusting infrastructure that is decaying as the analysts seem to imply.
Tom Hickey Reply:August 2nd, 2010 at 2:18 pm
Makes sense to me. The SAudis have been in production for a long time and Brazil is just coming online. Why shouldn’t Brazil have the latest equipment, and the Saudis not be left with mostly old? That’s how the US fell behind Japan in heavy industry like steel production.
beowulf Reply:August 2nd, 2010 at 5:34 pm
Brazil no doubt spends more on infrastructure for the “latest oil extraction technology” because their oil is offshore in deep water. The Saudis don’t need the latest equipment, they’re already the lowest cost oil producer.
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Warren B. Mosler