Gas prices this summer

[CA renter]

[quote=afx114]WikiLeaks cables show speculators behind 2008 oil bubble

Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of ’08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators.

…

All of this is significant because both the Bush administration and the Obama administration have denied this narrative to various degrees. The CFTC only recently admitted that speculation played a role in the 2008 mess, having originally (and stubbornly) blamed supply and demand issues. Subsequent analyses have shown that the Saudi position, that worldwide demand for oil never increased nearly enough to account for the gigantic 2008 price spike, was almost certainly correct.

More on this to come later. Given the surge in commodities prices in the last year (which may in part have caused the rise in food prices that led to disturbances in the Middle East) and the Obama administration’s seeming reluctance still to rein in speculators, it’s remarkable that this issue doesn’t get more press. It’ll be interesting to see how much ink these Wiki cables get.

[/quote]

Good stuff, afx.

But, “nobody could have seen it coming.”

[Arraya]

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

[Arraya]

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

[Arraya]

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

[Arraya]

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

[Arraya]

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

[Rich Toscano]

Speculators can contribute to short-term spikes and drops (eg they surely played a role in the rapid 2008 runup to $147 and subsequent crash to $34).

But they aren’t responsible for the general trend towards high oil prices that we’ve seen this decade. Global oil production has basically not increased at all for 5 or 6 years against a trend of increasing global demand.

Speculators, along economic booms and slowdowns, can cause a lot of volatility around the underlying upward trend in oil prices. But they aren’t responsible for the trend itself… the “blame” there lies with the inability of oil production to keep up with rising demand.

[Rich Toscano]

Speculators can contribute to short-term spikes and drops (eg they surely played a role in the rapid 2008 runup to $147 and subsequent crash to $34).

But they aren’t responsible for the general trend towards high oil prices that we’ve seen this decade. Global oil production has basically not increased at all for 5 or 6 years against a trend of increasing global demand.

Speculators, along economic booms and slowdowns, can cause a lot of volatility around the underlying upward trend in oil prices. But they aren’t responsible for the trend itself… the “blame” there lies with the inability of oil production to keep up with rising demand.

[Rich Toscano]

Speculators can contribute to short-term spikes and drops (eg they surely played a role in the rapid 2008 runup to $147 and subsequent crash to $34).

But they aren’t responsible for the general trend towards high oil prices that we’ve seen this decade. Global oil production has basically not increased at all for 5 or 6 years against a trend of increasing global demand.

Speculators, along economic booms and slowdowns, can cause a lot of volatility around the underlying upward trend in oil prices. But they aren’t responsible for the trend itself… the “blame” there lies with the inability of oil production to keep up with rising demand.

[Rich Toscano]

Speculators can contribute to short-term spikes and drops (eg they surely played a role in the rapid 2008 runup to $147 and subsequent crash to $34).

But they aren’t responsible for the general trend towards high oil prices that we’ve seen this decade. Global oil production has basically not increased at all for 5 or 6 years against a trend of increasing global demand.

Speculators, along economic booms and slowdowns, can cause a lot of volatility around the underlying upward trend in oil prices. But they aren’t responsible for the trend itself… the “blame” there lies with the inability of oil production to keep up with rising demand.

[Rich Toscano]

Speculators can contribute to short-term spikes and drops (eg they surely played a role in the rapid 2008 runup to $147 and subsequent crash to $34).

But they aren’t responsible for the general trend towards high oil prices that we’ve seen this decade. Global oil production has basically not increased at all for 5 or 6 years against a trend of increasing global demand.

Speculators, along economic booms and slowdowns, can cause a lot of volatility around the underlying upward trend in oil prices. But they aren’t responsible for the trend itself… the “blame” there lies with the inability of oil production to keep up with rising demand.

[Arraya]

The only thing that could prevent another major oil shock from happening before the end of 2012, would be another major economic contraction. Without a contraction, keeping inflationary policies, in the face of a major oil shock, should be interesting. Throw in the wall street gambling cartel pushing up prices and that is what causes revolutions in third world countries

[Arraya]

The only thing that could prevent another major oil shock from happening before the end of 2012, would be another major economic contraction. Without a contraction, keeping inflationary policies, in the face of a major oil shock, should be interesting. Throw in the wall street gambling cartel pushing up prices and that is what causes revolutions in third world countries

[Arraya]

The only thing that could prevent another major oil shock from happening before the end of 2012, would be another major economic contraction. Without a contraction, keeping inflationary policies, in the face of a major oil shock, should be interesting. Throw in the wall street gambling cartel pushing up prices and that is what causes revolutions in third world countries

[Arraya]

The only thing that could prevent another major oil shock from happening before the end of 2012, would be another major economic contraction. Without a contraction, keeping inflationary policies, in the face of a major oil shock, should be interesting. Throw in the wall street gambling cartel pushing up prices and that is what causes revolutions in third world countries

[Author]

Posts