"But of course the oil the oil prices are going up, you know the Saudi King died and all and terrorists and stuff, it's just the usual market hysteria, nothing to see here, move along...."

You're not my king, I didn't vote for you...

Their new king is 82 years old, how about that?

Long Live (What's Left Of) King Abdullah (formerlly Prince Abdullah.)

During the Ottoman Empire's heyday, each new sultan upon taking power would murder all his male relatives, including the boys and the old men, to ensure that no one from within his family would challenge his rule. The Saud family apparently hasn't followed that tradition.

With the U.S. in Iraq and the prospect of a hostile alliance forming between Iran and the Shia majority in Iraq, the Sunni Saudi princes probably have every reason to sort out into rival factions and start scheming to take over the country and change its policies against favoring American interests.

I think many have underestimated the potential ramifications of the change in leadership (probably because every media outlet has stressed and restressed that there will be no change in policy....hmmmm) But this evening on NPR I heard one person say that there may be alot more pressure on the new king to restrict output and "conserve" SA's only (and very precious) natural resource. I about choked. Thank god it was a small seemingly innocuous statement on NPR.... say something like that on a big business news channel and the poopoo could contact the whirling blades mighty fast. Think of it this way.... every oil producing country EXCEPT Saudi Arabia is pumping flat out. SA truly controls the price of crude as it is the only country with spare capacity (or did) and has held the price down. The new king could make an awful lot of friends in the neighborhood if some mysterious accident put a crimp in production. Transitions are always a time of stress and change.... and it's always good to have friends at times like that..... something to think about.

Oh man if they just cut back a little just a hair a smidgen. Or just talked about it openly said stuff like "we need to do major upgrades to our production capabilities''

They could literally make twice or three times as much money selling half as much oil as they are now. Why would you not do this in a capitalist system?

I am mean it is just supply and demand working out to the fair market value.

If SA says anything about cutting back or doing major repairs, I would guess 100 dollars a barrel would be a real possibility. And if demand destruction started to take effect and people cut back on wasteful driving and such well then just cut back more till you reach the inelastic demand point.

A report in Financial Times Tuesday's edition states that SA will be less inclinded now to have US contractors construct any new energy facilities. They have also refused US companies from starting any major work for the last three years.

They may not want US companies there because of political sensitivities, but then why haven't they invited other foreign companies in to proceed with the much talked about development of oil reserves? Or even more gasoline refining capacity - where there is a ready market in the US?

One might conclude that these projects are not profitable at current price levels - or even worse, like Matt Simmons says - we have reached the twilight of SA productive capacity.

$100 is a round number that will have little meaning if SA oil supplies are disrupted or production otherwise peaks out.

A quick history by the Iternational Herald Tribune

http://www.iht.com/articles/2005/08/01/ ... 1fahd2.php

I thought we were an autonomous collective

Because we're not discussing chairs or cars, but a vital strategic resource. The US would either roll into SA from Iraq/offshore amphib or install a puppet regime or both etc.

Yeah, the US rolling into SA and controling Mecca and Medina would be no problem for the US military. Seeing as how we have taken care of that whole Iraq thing.

strange women lyin' in ponds distributin' swords is no basis for a system of government

I think the kingdom of Saudi Arabia will remain stable atleast for the next couple of decades as the surviving sons of the founder take their turns at the throne. As per the succession scheme, all the 44 sons (many of them are already dead) of King Saud have a claim to the throne. The youngest son is reportedly in his early 60's so perhaps the current generation might carry on for another couple of decades.

The test will come in passing the leadership to a younger generation. There are as you can imagine, hundreds of grandsons and no clear scheme of succession among them. It will interesting to say the least how that will play out.

So someone finally opened the box and looked at Schroedinger's King, I see. This will get ugly, I'm sure of it.

Because they know that if they demolish demand they will lose money in the long run.