Saudi Arabian oil minister says kingdom ready to boost output
The kingdom’s oil minister insisted this week that oil markets are amply supplied and that it stands ready to boost output. Its council of ministers asserted that excessively high petroleum prices threaten the global economy and that a downturn would lead to an abrupt pullback in prices, hurting the interests of oil exporters and consumers.
Last week, the transport arm of state-owned Saudi Aramco booked at least nine supertankers — far more than usual — for shipments to the United States, according to traders and Lloyd’s List. Each tanker can carry 2 million barrels of oil.
And the Saudi oil minister, Ali al-Naimi, told reporters in Doha, Qatar, on Tuesday that the kingdom was producing 9.9 million barrels a day, about three-quarters of which is exported.
...
“What the Saudis are trying to do is to change the psychology of the market and demonstrate that the market is well supplied,” said Robin West, chairman of PFC Energy, a consulting firm.
...
Naimi said that Saudi Arabia could boost output to 12.5 million barrels a day to meet demand but that customers are not interested in buying more than they are now.
“We ask the customers, ‘Do you need more?’ And invariably the answer is, ‘No, thank you,’ ” he said, according to Reuters.
One major oil trader, who requested anonymity to protect business relationships, said that if Saudi Arabia really wanted to tamp down prices it could lower its asking prices and then customers might buy more.
http://www.washingtonpost.com/business/economy/saudi-arabian-oil-minister-says-kingdom-ready-to-boost-output/2012/03/21/gIQAW0DfSS_story.html
Hm. So what's the news here. They've booked 9 supertankers for passage to America, 2 million barrels each so that's 18 million barrels, articles says 9 supertankers are "far more than usual." They SAY they can boost to 12.5mpd. Sounds like all talk? "Trying to influence the psychology of the market," as the article says?
If they really can ramp up from 9.9mpd to 12.5mpd on a dime, then they should go ahead and do it just to prove to everyone they can -- that would give future statements more credibility.
I don't know. The whole thing sounds unscientific and mickey mouse. They book extra supertankers to do what exactly, run around empty and psych people out?
And: “We ask the customers, ‘Do you need more?’ And invariably the answer is, ‘No, thank you,’ ” he said, according to Reuters. WTH, this isn't mangoes being sold on the street corner -- I would expect these decisions to sound precise and sound like they KNOW what they're talking about, does the world need more oil or doesn't it they should know this is their business, this is like talking out both sides of the mouth there "we can do 12.5 mpd / we ask if they want more nobody wants more oil."
They should just ramp up production if they really can and put it out there, but then price would go down with the extra supply and I guess they like the high prices just fine -- yet in the same article they admit prices are too high and are going to cause another recession.