Alwaleed: Saudis Seek Oil Price of $70-$80

This is the second time he’s said this in the last couple of weeks.

If he’s right about the Saudis wanting that price, that’s where the price will go.


Alwaleed: Saudis Seek Oil Price of $70-$80

May 29 (CNBC) —Prince Alwaleed bin Talal said an oil price of $70 to $80 a barrel is in the best interests of Saudi Arabia because it diminishes the urgency in the U.S. and Europe to develop alternative energy sources.

“We don’t want the West to go and find alternatives,” Alwaleed, a nephew of Saudi King Abdullah, said in an interview on CNN’s “Fareed Zakaria GPS,” scheduled for broadcast tomorrow. “The higher the price of oil goes, the more they have incentives to go and find alternatives.”

The rebellion in Libya, political turmoil in Bahrain and speculative buying are responsible for driving oil prices to more than $100 a barrel, Alwaleed said. Crude for July delivery rose 36 cents to settle at $100.59 a barrel on the New York Mercantile Exchange yesterday. Prices have increased 35 percent in the past year.

Alwaleed, who owns Citigroup Inc. (C) shares and ranks 26th on Forbes magazine’s list of the world’s richest billionaires with a net worth of $19.6 billion, said he continues to invest in the U.S. and that the nation is “down, for sure, but it is not out.” Standard & Poor’s lowered its U.S. credit-rating outlook on April 18 to negative, citing the widening budget deficit.

Saudi Arabia needs to enact laws that allow for greater public participation in government, Alwaleed said. U.S. President Barack Obama’s administration is seeking to encourage pro-democracy movements inspired by those that ousted longtime leaders in Tunisia and Egypt as part of the so-called Arab Spring to create broader, regional changes.

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6 Responses to Alwaleed: Saudis Seek Oil Price of $70-$80

  1. Pingback: Supply Side Inflation | Modern Money Mechanics

  2. Damien says:

    Would be dollar positive for sure. A few other factors that would argue for a stronger dollar are:

    1. Reduced war spending in Iraq i.e. end of year withdrawal
    2. Stability in Saudi Arabia as government emergency spending has run its course and calmed things down (house of Saud safe for now).
    3. Pull-out from Afghanistan announced?
    4. China terms of trade deteriorate, recession?
    5. Euro problems (Eurozone blows up)…
    6. Commodity complex correction/bear market? This would drive money out of BRICS, commodity currencies into $US.
    7. Fiscal tightening in $US just starting…
    8. Fiscal tightening in non $US currencies now well advanced driving those countries into recession.

    Reply

    WARREN MOSLER Reply:

    meanwhile, crude is creeping up (even with the prince stating the saudis are targeting 70-80) and the dollar is giving back recent gains.

    Reply

    Damien Reply:

    @WARREN MOSLER, Interesting that the NZD/USD cross has risen to new highs. I would have expected it to diverge relative to other currencies given its small cap nature but clearly we are still in a sell the dollar environment?

    Having said that recent fiscal tightening measures out of New Zealand may be driving it higher along with ongoing NZD dollar buying by the re-insurers to cover earthquake liabilities. They also just posted a record trade surplus on exports to none other than China.

    I think in this environment staying small or nimble is the best bet but I definitely wouldn’t be chasing the dollar south here. The market will get it right eventualllllly. :)

    Reply

    WARREN MOSLER Reply:

    with crude moving up even faster than the dollar is moving down this does not look like a good entry point for a long dollar position to me!

    macrosam Reply:

    @WARREN MOSLER,

    Yep. I learned that the hard way waking up this morning.

    Reply

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