Posted Nov 13th 2007 11:35AM by Joseph Lazzaro
Filed under: Bad news, Exxon Mobil (XOM), Middle East, Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Commodities, Oil
A day after word spread through the oil markets suggesting that Saudi Arabia was set to press for a 500,000-barrel OPEC oil output increase, Saudi Arabia's oil minister said Tuesday that OPEC members will not announce an increase in oil production at an oil producers summit this weekend.
"There will be absolutely no discussion" of a production increase when the meeting convenes in Riyadh, the Saudi capital, Saudi Oil Minister Ali Naimi said, the Financial Times reported.
The markets had factored-in an OPEC production hike, a fact that helped oil prices pull-back more than $4 from recent highs. Oil continued to drift lower Tuesday, falling $1.00 to $93.62 in morning trading.
No small favors
OPEC's decision, if it holds, will force oil traders to reassess their calculations regarding overall oil market supply and demand, according to Jim Dietz, an independent energy trader.
"Well, as the saying goes, 'So much for small favors.' The oil market needed that supply increase. The market wanted that supply increase. But as of now, it doesn't look like it's in the cards," Dietz told BloggingStocks. "If the no-increase decision holds at the weekend meeting, this puts the oil market back to the old consensus, which is a very small safety cushion between supply and demand."
Dietz said he now expects oil to re-test its 2007 highs, and once again march toward $100 per barrel, and probably beyond.
Link to article.
Get ready for it if you live in the North East of the US.
Home heating oil prices are going to be crippling this winter.
The price of gas is probably going to hit 4 bucks a gallon by spring.
There is no reason for OPEC to increase production, they are making money by the boatload as it is.
Chalk up one more reason why we need a fucking President who can see past the end of his dick when it comes to shaping any kind of energy policy that does not involve gargling the balls of Big Oil.