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Tuesday, March 25, 2008

Cheney convinces Saudis to lower oil prices

If this is correct, our recession fears may be over. DEBKA is reporting that Vice President Dick Cheney has convinced the Saudis to increase production enough to lower the price of a barrel of oil to $85-90. Oil has recently been trading in the $110 per barrel range.
The Saudi Supreme Oil Council’s statement emphasized OPEC’s role in “stabilizing the world energy market and realizing global progress and prosperity.”

It also “emphasized the Kingdom’s desire for oil market stability, and ensuring supplies to different regions at all times to maintain world economic growth.”

The council expressed its satisfaction with the progress in new investment projects for expanding oil production and refine capacity; and, finally, committed the kingdom to working with OPEC countries, other producers and consuming countries toward oil market stability and avoidance of the effect of harmful speculation.”

These decisions, as DEBKAfile’s Gulf oil sources disclose, add up to the Saudi King’s compliance with Cheney’s request to act for stable world oil prices - by speeding up the expansion of production and refining projects both inside OPEC and in cooperation with other world producers, such as Russia and Norway.

Cheney thus succeeded where President George W. Bush failed in January.

The Saudi monarch refrained from complying with the US president’s request to persuade members of OPEC, the Oil Producing Cartel, at its last meeting to step up production. The Saudis only spiked the initiative of radical members, led by Iran and Venezuela, to cut production down.

Saudi Arabia has targeted the year 2009 for increasing its output from 11 to 12.5 million barrels per year. The new Council decision brings the target date forward by some months. In any case, the kingdom does not export all it produces and could sell more by drawing on its emergency reserve.
Like I said, if this is true, we may no longer have to worry about a recession.

I gassed up my car last night for the first time since I returned from the US and was astounded to discover that the price had risen to NIS 6.32 per liter. With the exchange rate around NIS 3.4 to the dollar (it actually rose today to NIS 3.52 due to Bank of Israel intervention), we are paying around $7 per gallon for gas. And you thought you had it bad.


At 1:09 AM, Blogger Thud said...

At $10 a gallon here i'd sooner see the oilfields burn than hand more money for the use of those who hate us.

At 9:15 AM, Blogger Ashan said...

Carl, this is being done at Israel's expense. What do think Cheney's "painful concessions" crap was all about? Israel will give up half of Jerusalem, let Palithugs out of prison and arm the "good" terrorists to the teeth for this.

What I can't understand is why Israelis aren't organizing street protests. I and my 2 (grown up) kids would be happy to get out there, but we just can't walk around aimlessly with placards.


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