OPEC Output Hike Unlikely
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Eight-cylinder luxury cars will rumble along Jeddah’s highways guzzling cheap Saudi gasoline as energy powers hold emergency talks in the Red Sea port this weekend to brake the free-wheeling rise in oil prices.
Oil Minister Ali al-Naimi told Ban that Saudi Arabia would raise oil output to 9.7 million barrels per day in July, its second output rise in two months and the highest Saudi output since August 1981, according to U.S. statistics.
Venezuela is snubbing the Jeddah meeting.
Officials from the producer group say oil supplies are adequate and blame the high price on warmongering over Iran’s nuclear program, massive investment flows into commodities and the slump in the U.S. dollar.
Spare Capacity
Limited extra capacity and the potential for demand to outstrip supply in years to come have helped drive oil’s rally.
Either you slow demand and increase supply or prices are going to go a lot higher.”
Longer-term capacity commitments from Saudi and other producers might help, Sieminksi said.
Sanctions have constrained international investment in Iran, the second-largest oil reserve holder.
OPEC blames speculators for inflating oil’s rally and adding to volatility and wants increased regulation of futures markets.
Oil market observers question whether very much can be done in Jeddah in the short-term to bring oil down.
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