What to watch for at Jeddah’s oil summit

What to watch for at Jeddah’s oil summit

www.ft.com

Saudi Arabia could also do something radical, having lulled the market into expecting little. The kingdom has announced surprises before. Nervous traders suggest Saudi Arabia could ‘drop a nuclear bomb on the market’ by changing the way it prices its oil, slashing its prices and de-linking them from international futures markets. This would be a reversion to the past. Until the early 1980s - the infancy of the futures markets - Saudi Arabia set its oil price monthly.

This could have a huge impact on prices because Saudi Arabia would in effect be setting market prices, kill speculators and drive a wedge into its relationship with other Opec members.

(visit the link for the full news article)



Mod Edit - Headline: Please use the original story headline from your source.

[edit on 6/21/2008 by JacKatMtn]

We can only hope that the meeting between "The Kingdom", Opec members and consuming countries will have a huge impact on the oil market and get rid of this thorn in our wallets.

www.ft.com
(visit the link for the full news article)

Why would they do that for, they are not our friends no matter what the Bush administration tells us, they are Arabs and they are supporters of terrorist organizations.

Their goal is to bring down the west for years, the greed of America consumption for oil, the meddling of our government in their lands and the support for Israel has made us their enemy, but an enemy that has made them filthy rich.

They actually do not need us anymore when they have an open and growing market in China and other developing countries like India.

Originally posted by marg6043
Why would they do that for, they are not our friends no matter what the Bush administration tells us, they are Arabs and they are supporters of terrorist organizations.

Their goal is to bring down the west for years, the greed of America consumption for oil, the meddling of our government in their lands and the support for Israel has made us their enemy, but an enemy that has made them filthy rich.

They actually do not need us anymore when they have an open and growing market in China and other developing countries like India.

Because the entire western world shifting over to hydrogen or something else would render their economy trash...the princes would be over thrown instantly...they aren't stupid. The Princes are our "friends," it's the people under them who hate us...because we keep the princes in power. I'm not saying they will, but I would expect oil to take a decent sized drop (at least a $15-20 correction)...I do expect more out of this meeting than what people have been saying.

[edit on 20-6-2008 by yellowcard]

The only way to bring the prices down rest in the hands of our own government.

You are right we are the ones supporting their feudal monarchy and keeping their elitist monarchy rich and in control.

Legislation is the only way to stop the gouging in our own backyards.

To myself, the only quick solution might be to hold the price somewhere such as 100.00 US dollars a barrel and bring regular gas down to $3.00 and freeze it also.

THis could be done for something like 6 months to a year. It seems to be important to switch over to alternatives anyway. If I lived in Europe, I probably wouldn't be driving a car. The US, it seems, isn't set up for bikes and mopeds. (yet) If only we hadn't wasted so much money on the Iraq war, we could better afford to make these needed changes. (as if)

It should be obvious to these other possibly oil only exporting countries, that they also need to switch.

Wow Ive known about this for a couple years but I heard it was Iran that was going to do it. I heard their purpose was to flood the market with cheap oil and doing it in euros to crash the dollar. Didnt think Saudi Arabia was really the one.....Interesting.

Originally posted by aleon1018
To myself, the only quick solution might be to hold the price somewhere such as 100.00 US dollars a barrel and bring regular gas down to $3.00 and freeze it also.

THis could be done for something like 6 months to a year. It seems to be important to switch over to alternatives anyway. If I lived in Europe, I probably wouldn't be driving a car. The US, it seems, isn't set up for bikes and mopeds. (yet) If only we hadn't wasted so much money on the Iraq war, we could better afford to make these needed changes. (as if)

It should be obvious to these other possibly oil only exporting countries, that they also need to switch.

America has a disadvantage in that it is so sprawled, and our public transportation systems are only in big cities...but don't connect big cities. There are a lot of things Congress and state governments could do to stop this oil run up...I think this meeting is a step in the right direction. I don't think the Saudis would call this meeting for no reason...there is something big coming out of this, and it could be positive, or negative...but more likely positive (in that it helps out us little guys trying to foot our gasoline bills)

Much of the price reaction would depend on what Saudi Arabia says about the reason for current high oil prices. If the kingdom argues supply tightness has nothing to do with record prices, reverting to blaming speculators, refining bottlenecks and the weakness of the US dollar, it would mean that recent signs that Saudi Arabia was softening its stance had been misread.

Duh! Living in reality!

It's not because the supply is *artificially* short that the US dollar is weak, it's because the US economy is a paper tiger, refining bottleneck are created artificially, and of course speculators are in the balance. Also, there's all those threats from Israel and Bush against Iran that drives the price high.

DUH! So. Weak dollar, speculation, war threats, artificial low oil output, alternative energies being hidden.

Originally posted by marg6043
Their goal is to bring down the west for years, the greed of America consumption for oil, the meddling of our government in their lands and the support for Israel has made us their enemy, but an enemy that has made them filthy rich.

Boy, you sure have a twisted view of the world.

Greed of America consumption for oil?? What does that even mean?
It's not greed. Oil just happens to be the foundation of industry. Without oil, industry would cease to exit. It's like humans needing food & water.
This is how industry works in all developed nations. Why is it only America which you consider greedy and not China or India?

Meddling of our government??
Well, if it were not for our 'meddling', Saudia Arabia would not even exist in it's current form. You do realize it was Americans who found the oil in Saudi and showed them how to get it out of the ground. Those bastards should be grateful for our 'meddling' because otherwise they would still be a bunch of nomads traveling in the desert.

Vitchillo the oil prices are because of the dollar. This can go REALLY bad if they drop out and depeg their oil from dollars to euros like I think Iran threatened to do. I promise you if that happens our dollar will collapse and get ready to pay $20 a gallon. Thank your government for spending and printing money we dont have for this situation. Walking on the line of bankruptcy.

reply to post by WhatTheory


See theory this is why I like very limited foreign interventions. it seems we go to war to help allies all the time and they all screw us in the end. Like we helped France in Vietnam we all know the crap they did...kuwait first gulf war now they are threatening to depeg from the dollar, and on and on. I think we need to keep to ourselves all these people we build them all up and they all screw us in the end.

BTW the extremists DO hate us because we are in their land not because they hate our freedoms

Originally posted by mybigunit
Vitchillo the oil prices are because of the dollar. This can go REALLY bad if they drop out and depeg their oil from dollars to euros like I think Iran threatened to do. I promise you if that happens our dollar will collapse and get ready to pay $20 a gallon. Thank your government for spending and printing money we dont have for this situation. Walking on the line of bankruptcy.

The dollar is a reason, but not the main reason...Europe, China, India and everyone are suffering from high inflation as a result of oil prices, everyone is experiencing the pinch. Europe's economy is about to fall apart because their currency is too strong relative to the dollar, depegging oil from the dollar would murder world markets. A depegging wouldn't kill the dollar per se, on the basis of PPP (purchasing power parity) the dollar is undervalued...and with yields rising, the dollar should get a bit of strength later in the year.

[edit on 20-6-2008 by yellowcard]

When they be ready to kill America economy the will completely switch to Euro, right now they are just partially using euro.

But that they are losing money with the weak dollar is a reality, as business people that the Arabs has become thanks to America they will eventually will be looking for their own interest and screw America.

Originally posted by marg6043
When they be ready to kill America economy the will completely switch to Euro, right now they are just partially using euro.

But that they are losing money with the weak dollar is a reality, as business people that the Arabs has become thanks to America they will eventually will be looking for their own interest and screw America.

Then why are their sovereign wealth funds buying American assets? If the American economy were to collapse, so would the entire world's economy...and their holdings in companies like Citi Group and other various U.S. based firms would drop substantially. There is nothing to support a doom and gloom scenario, and the economics of simple supply and demand in U.S. treasuries (the most liquid market in the entire world) make such a scenario near impossible.

Originally posted by yellowcard


The dollar is a reason, but not the main reason...Europe, China, India and everyone are suffering from high inflation as a result of oil prices, everyone is experiencing the pinch. Europe's economy is about to fall apart because their currency is too strong relative to the dollar, depegging oil from the dollar would murder world markets. A depegging wouldn't kill the dollar per se, on the basis of PPP (purchasing power parity) the dollar is undervalued...and with yields rising, the dollar should get a bit of strength later in the year.

[edit on 20-6-2008 by yellowcard]

Ummm Ill have to disagree with you on the affects of dollar depegging. The fact is if all these people depegged the oil you would see countries dumping the dollar like mad. Last I checked when there is a huge supply of something (the dollar) and not enough demand the item loses value.

Dont be Bernenke and say it doesnt affect our purchasing power because one year ago while Ron Paul was grilling him he told Ron Paul the same exact thing that it wouldnt affect us unless we bought crap over seas. Well we now see this to be incorrect as EVERYTHING you lay your hands on has increased big time.

Surely George W. Bush bending over for Prince Bandar should result in at least something like this. But usually whoring doesn't pay unless ya gets the money up front.

Of course, the promise of an outgoing Presidential Pardon of all Saudi citizens.... that might be worth it.

Originally posted by yellowcard

Then why are their sovereign wealth funds buying American assets? If the American economy were to collapse, so would the entire world's economy...and their holdings in companies like Citi Group and other various U.S. based firms would drop substantially. There is nothing to support a doom and gloom scenario, and the economics of simple supply and demand in U.S. treasuries (the most liquid market in the entire world) make such a scenario near impossible.

Ask the Japanese who lost a lot of money investing in America in the 80s. just because sovereign wealth funds are buying stuff does not mean its a guaranteed win. I happen to believe the banks ARE a good investment and I am actively cost averaging on major banks because I am a believer that these guys are sitting on a ton of cheap borrowed cash from the fed and are just waiting for the fed to raise rates to let it all flow. You could see Citi hit $100 in 3 to 5 years But to say we cant collapse is very arrogent for ALL empires of the past have collapsed and we will to someday just hopefully not sooner than later.

Originally posted by mybigunit
Ummm Ill have to disagree with you on the affects of dollar depegging. The fact is if all these people depegged the oil you would see countries dumping the dollar like mad. Last I checked when there is a huge supply of something (the dollar) and not enough demand the item loses value.

Dont be Bernenke and say it doesnt affect our purchasing power because one year ago while Ron Paul was grilling him he told Ron Paul the same exact thing that it wouldnt affect us unless we bought crap over seas. Well we now see this to be incorrect as EVERYTHING you lay your hands on has increased big time.

But you are completely ignoring the bond market's power over the forex...if people dumped U.S. treasuries the Yields would sore and become more attractive to investors...it would kill the debt market but the dollar's strength would probably be better of in the long run, because higher yields would force Congress to make budget cuts, money would no longer be easy [easy credit] (which is the main reason the dollar is so weak). Another reason the dollar is trash now is because the Fed Funds rate is below the inflation rate, a sell off of t-notes would force yields well above the inflation rate. In actual printed money, we have hardly printed any, it's our debt which is out of control..but if it pays a high yield people will want to hold it and obviously tighter credit, is a tighter money supply = stronger dollar [it would actually be more like a deflationary spiral].

[edit on 20-6-2008 by yellowcard]

Originally posted by mybigunit
Ask the Japanese who lost a lot of money investing in America in the 80s. just because sovereign wealth funds are buying stuff does not mean its a guaranteed win. I happen to believe the banks ARE a good investment and I am actively cost averaging on major banks because I am a believer that these guys are sitting on a ton of cheap borrowed cash from the fed and are just waiting for the fed to raise rates to let it all flow. You could see Citi hit $100 in 3 to 5 years

But to say we cant collapse is very arrogent for ALL empires of the past have collapsed and we will to someday just hopefully not sooner than later.

You're right, it's not guaranteed success, it's an incentive to support our markets. Why would you dump an asset that is going to destory your own assets? You won't...we could collapse, but we now live in a world market, and the likelihood of a collapse is slim in the terms that Rome collapsed. We could have an economic collapse, but the market works and the world has an incentive to see that everything is going steady to support their own societies.