Reply #33: Some thoughts about the Saudis ~

[cliss]

1. Yes I agree the Saudis must be furious at the US 'meddling' in the ME / N. Africa. I personally believe the US didn't interfere, but they could only stand on the sidelines and watch as things deeteriorated, caught between a rock & a hard place. They finally came out in favor of the demonstrators. Message to other countries: you corrupt leaders don't count on us. We'll dump you faster than you can say 'Mubarak'.

2. Not enough oil. I believe Saudi Arabia with its gigantic oil field the Ghawar, is starting to slow down. They've been pumping in salt water underground to force more oil up. This has probably damaged the well plus SA probably hit its peak back in 2006?


3. A little hard up for cash. Saudi Arabia just gave $93 billion to their disgruntled citizens. It was done in order to prevent a revolution. So now they need some dough.

4. Incredible paper inflation, covering the world with dollars. Stupid FED started its QE-4 Quantitative easing - another word for unbelievable paper printing, making inflation inevitable. Saudi Arabia and other Petro countries get pissed because their Petrodollar holdings are going down. They have to raise prices now because their dollar holdings are going down in value.
The US

5. A worldwide thirst for oil. Why be nice? Why not just tell the US to go jump off a bridge. Sell to whoever can pay the most. Oil prices have always been dictacted by a number of things, among them sensitivity to price hikes (elasticity of demand). If they raise the prices too much, people start to cut back, reduce usage, start to look at oil alternatives and so on. Producers have always know they can't just double or triple the price, because there will be some unintended consequences. But in this economy, who cares?