(OilandGasInvestmentBulletin) – Current OPEC spare capacity would suggest a lower world oil price, but the distribution of this spare capacity could be one reason why oil prices are higher than many experts think it should be.
Usually the more spare capacity (supply) in a market there is the lower the price – simple economics. But the reality is that Saudi Arabia is the only country in the world with significant spare capacity to produce more oil in the world and influence prices. And they currently favour a $70-$80 barrel oil price.
In 2003, OPEC had 2 million barrels a day LESS spare capacity it has now, and oil was under $40/barrel – but spare capacity was more evenly spread out among the 11 member states.
If everybody has spare capacity, the potential for cheating on production quotas is greatly increased and that carries a higher downside risk for prices. Should the world economy grow more quickly, only the Saudis have the ability to increase production enough to meet demand and influence prices. Read entire article
(RawStory) – Elena Kagan, President Barack Obama’s latest nominee to the Supreme Court, helped protect the Saudi royal family from lawsuits that sought to hold al Qaeda financiers responsible in the wake of the Sept. 11, 2001 attacks.
The suits were filed by thousands family members and others affected by the Sept. 11 attacks. In court papers, they provided evidence that members of the Saudi royal family had channeled millions to al Qaeda prior to the bombings, often in contravention of direct guidance from the United States. Continue reading →
“On my last day in Iraq,” veteran McClatchy News correspondent Leila Fadel wrote August 9th, “as on my first day in Iraq, I couldn’t see what the United States and its allies had accomplished. …I couldn’t understand what thousands of American soldiers had died for and why hundreds of thousands of Iraqis had been killed.” Continue reading →