Wednesday, May 18, 2005

Saudi Arabia Talks Down the Price of Oil

sistani

Unable to pump or process more oil, as a favor to Bush, the Saudis are talking as if they are pumping more oil. If hot air were useful as energy, this lying could fuel a million SUVs. We all saw the Bush/Arabian Prince kiss up and this is the result.
Saudi Arabia's oil minister said Tuesday that the kingdom has enough oil in the ground to meet global demand for decades to come and that there is no plan to curb daily output, even as rising inventories help ease prices below $50 a barrel.

Ali Naimi said the world's largest petroleum exporter will not reach peak output anytime soon and that it is in Saudi Arabia's financial interest to try to bring down very high prices, which hinder economic growth and sap demand.

"I stand here to tell you that Saudi Arabian reserves are plentiful, and we stand ready to raise output as the market dictates," Naimi said at a conference that brought him and U.S. Energy Secretary Samuel Bodman together, publicly, for the first time.

The Saudi royal family has to share oil profits with the populace. They also have extensive property and business dealings so they, of course, are conspiring against their own people to drop the price of oil which is bad for the people in their country. Accelerating pumping is very bad for them since this burns right through the resource faster. In the end, when it all runs out, the system will collapse in a disasterous way. Just recently, the Saudi princes suddenly allowed non-Saudis to apply for citizenship further diluting the power of native Saudis. There are many odd things at work here but let us note, this is typical of international rich people. They betray their host nation every chance they get.
Naimi's message was conciliatory toward the U.S., the world's largest energy consuming nation, his words failed to impress the market. While prices have come down from a high above $58 a barrel early last month, light, sweet crude for June delivery rose 36 cents on Tuesday to settle at $48.97 a barrel on the New York Mercantile Exchange.

No kidding it didn't impress anyone with half a brain. If the Saudis want to pump more oil, all they have to do is do it. They haven't so they can't.
Saudi Arabia now pumps 9.5 million barrels of oil daily, with the capacity to produce 11 million barrels a day. By 2009, the country's daily production capacity will be 12.5 million barrels, Naimi said, reiterating an earlier pledge.

"I can assure you that we haven't peaked," Naimi said in response to a question. He added that Saudi Arabian production instead is headed toward a plateau where it "can maintain 12.5 million or 15 million for the next 30 to 50 years."

Earth to Naimi: Saudi Arabia has been at a "plateau" for the last 20 years. It can't increase it to 15 million bpd. And the nature of Hubbert Oil depletion is, once it starts to decline, the decline increases faster than the rise.
The speeches came the same day the Organization of Petroleum Exporting Countries released its monthly oil report, which trimmed forecasts for world daily oil demand for the year by 80,000 barrels a day to 83.94 million barrels. The OPEC report cited weakening economic growth and high prices.

The report also said OPEC would have to pump at its highest-ever rate this winter because of sharply weaker oil output from non-OPEC producers.

This is how the Hubbert Oil Peak works. The cumulative amount pumped declines industry wide starting with the weaker, smaller fields. In America, we still pump oil in Texas and California, both states have pumped oil for the last 75 years but they are on their last legs and the great North Slope fields are in definite decline. Over all as well as individually, they are pumping less each year, year after year and the new discoveries don't make up for the drop in pumping older wells.
Oil analyst James Burkhard of Cambridge Energy Research Associates said oil prices are cyclical, but cautioned that "it's not inevitable that we'll see prices fall from where they are now."

"The key variable is demand growth," he said.

World oil consumption rose by 3.5 percent in 2004, according to the International Energy Agency, which is forecasting demand growth to slow to 2.2 percent in 2005.

A change from the disasterous rate of 3.5% a year to a "mere" 2.2% still means more than doubling the amount needed every ten years which is impossible. The oil traders know this which is why all the hot air in the world won't bring down prices. This is why Ameria is ruinously spending $300 billion fighting Muslims over who controls the oil. The Saudi hostile take over of Iraq is floundering.

IRAN SENDS ENVOY TO IRAQ

The Saudi Princes hate one group of people more than they hate Jews: the Shi'ites. This hatred is personal and goes all the way back to one generation away from the Prophet's death. He insisted on mulitple wives and got this and this immediately caused a family crisis: too many sons, too many different mothers.

To this day, the crisis rages. The USA, to help Kuwait and Saudi Arabia, invaded Iraq illegally, as Mr. Galloway helpfully pointed out to the American Senators, and now the USA is bleeding to death and going bankrupt trying to hold onto this hot falafel and to do this, we made a deal with the Shi'ites in our rear who could block our access to the ports very easily. We basically let them take over 2/3 of the country. We then turned around and started our moronic verbal attacks on Iran. Both the Jews in Israel and the Saudi Princes want to see Iran destroyed. The Saudi Princes know that thanks to expensive oil and Pakistan's nukes, they can possibly run the New Muslim Empire using American Praetorian troops if only they get rid of these scary, old enemies. They are more than willing to make a deal with the devil. This is because they assume they have an iron grip on the American steering wheel and one wonders if this isn't just an illusion or is a nasty surprise for us all. After all, "born again" America was totally silent as they watched their hero literally slobbering kisses all over a person they hate. This odd crusade against Muslims is directed only towards Muslims who don't give us control of oil.
For his part, Mr. Kharrazi appeared eager to put the United States on notice that Iran expects to wield influence in Iraq, especially in the long term, that will match or outstrip the United States'. At one point, standing beside Ibrahim al-Jaafari, Iraq's new prime minister, Mr. Kharrazi fielded a reporter's question about the competition for influence in Iraq between Washington and Tehran with a reminder of what he described as the geographical realities.

"Let me add that the party that will leave Iraq is the United States, because it will eventually withdraw," he said in English, referring to the 138,000 American troops here. "But the party that will live with the Iraqis is Iran, because it is a neighbor to Iraq."

Iran/Iraq will become one state. One that is also as powerful thanks to both state's oil wells being run by the Shi'ites while on top of that, unlike Saudi Arabia, the Shi'ites will run their own industries and country. They will remove the Americans when the union is complete. It is laughably easy: just go passive while forcing frantic American troops fight the increasingly angry Sunnis. After we spend another trillion on trying to subdue the people there, we will be escorted to the door and booted out.
"We will build relationships between Iraq and other countries according to Iraqi standards and Iraqi national interests," he said. "We would like to see relations between Iran and the United States that are characterized by peace and love, and by a sense of their shared interests. But our relations with every country will be fashioned in a way that is independent of the positive or negative feelings they may have for any other nation."

Sounds like the Wen/Hu visits paid off. Prior to this, the Iranians did awful diplomacy. They talked more like the Americans. Now it is all smooth latte all the time.
In the 25 months since American troops swept Mr. Hussein from power, Ayatollah Sistani has refused to meet with American officials, leaving them to guess exactly what political preferences - or directives, as many Iraqis see them - he hands to the leaders of Shiite religious parties.

"Diplomacy for Dummies" has a sub chapter about this. "Do not fight someone else's wars."
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