UAE Pumping Flat Out, But "Nothing Can Be Done" To Ease World Prices - Oil Minister

[hatrack]

OPEC member the United Arab Emirates is pumping at full tilt at around 2.5 million barrels per day (bpd) of crude and is powerless to bring down record oil prices, the head of the state oil company said.

'Nothing can be done,' Adnoc chief executive Yousef Omair bin Yousef told reporters on the sidelines of an energy event. 'This is the market situation. We are doing our best to induce stability.'

Opec members blame the high price on factors beyond their control such as a weak dollar and the flow of investment funds into commodities.

'Current oil output is 2.5 million bpd,' Yousef said. 'We are at full capacity now... and we are gradually raising our capacity.'
The world's fifth-largest oil exporter was on track to boost output capacity to 3.5 million bpd by 2012 despite facing challenges from a tight market for engineering and construction companies, Yousef said.

EDIT

http://www.tradearabia.com/news/newsdetails.asp?Sn=OGN&artid=140469

[mickeyman]

1. oil & gas prices

I keep reading that oil and gasoline inventories are high and increasing at high rates.

Supply and demand is not driving up prices. Hoarding by speculators is the cause of high prices.

Eventually this bubble will collapse. The cost of storing all this oil is greater than the growth in demand. When the speculators realize this they will all sell in a panic.

[no_hypocrisy]

2. Welcome to DU, mickeyman.

[Finishline42]

4. Oil Future Contracts?

Oil futures contracts are now over $100 per barrel out to 2016.

[StClone]

3. Mining Gold as fast to help ease

It's soaring demand?

[Strelnikov_]

5. Gulf currencies may drop dollar peg

http://www.businessweek.com/ap/financialnews/D8VF9ARG0.htm

Kuwait's decision to stop pegging its currency to the dollar last year hasn't completely tamed inflation, but experts say many of its oil-rich neighbors will follow, desperate to fight inflation.

Oil is priced in dollars on the world market, but many Gulf countries rely on government-subsidized imports priced in euros and other currencies that have been rising against the greenback. This relationship has pushed up the price of imports, a dilemma that could get worse as fears of a recession in the U.S. and related interest rate cuts continue to push down the dollar. Raising their interest rates would have little effect on the Gulf states' inflation rates while their currencies remain pegged to the dollar.

. . .

Alan Greenspan, former chairman of the U.S. Federal Reserve, said at an economic forum in Saudi Arabia last month that de-pegging from the dollar would significantly help Gulf states battle rising inflation in the short term. Merrill Lynch predicted Qatar and the United Arab Emirates, suffering from inflation rates of 14 percent and 10 percent, would revalue their currencies relative to the dollar or de-peg. As with Kuwait's decision, a move by Qatar or the UAE would likely anger their U.S. ally.

. . .

Reyadh Faras, an economics professor at Kuwait University, disagreed, saying Kuwait's decision to abandon the dollar was significant and similar decisions by even larger countries could seriously erode the dollar's value. "If large countries like Saudi (Arabia) take the same step, its psychological effect will precede its actual one and it could lead to losses for the dollar," he said.


No worries. Alan has got our back . .

[hunter]

6. One way or another the bleeding always stops.

The price of oil will gradually increase giving us time to adapt, or else it will decrease as entire branches of the world economy fail.