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Thread: Saudis Slash Oil Output; Say Market Oversupplied

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    Default Saudis Slash Oil Output; Say Market Oversupplied

    Saudis Slash Oil Output; Say Market Oversupplied
    Published: Monday, 18 Apr 2011 | 5:40 AM ET Text Size By: Reuters

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    Saudi Arabia's oil minister said on Sunday the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.


    AP
    Saudi Arabia slashed oil output by 800,000 barrels per day in March.
    --------------------------------------------------------------------------------


    Consumers have urged the exporters' group to pump more crude to put a cap on oil, which surged to more than $127 a barrel this month, its highest level in 2 1/2 years amid unrest in North Africa and the Middle East.

    Oil Ministers from Kuwait and the United Arab Emirates echoed Saudi Arabia's Ali al-Naimi's concerns about oversupply and said rocketing crude prices were out of the hands of OPEC, which next meets in June.

    "The market is overbalanced ... Our production in February was 9.125 million barrels per day (bpd), in March it was 8.292 million bpd. In April we don't know yet, probably a little higher than March. The reason I gave you these numbers is
    to show you that the market is oversupplied," Naimi told reporters.

    Two Saudi-based industry sources told Reuters last week the kingdom had cut output due to poor demand, prompting selling by traders who saw it as a sign of a well-supplied market.

    But crude rebounded later in the week on optimism about the state of the U.S. economy.
    Naimi's words are the clearest indication yet that OPEC is unconvinced there is a need for more oil despite the civil war that has slashed Libyan output and expectations Japanese demand will rise as it scrambles to rebuild its earthquake-shattered electricity grid.

    "These statements underscore the breadth of the security premium currently in (oil) prices. Overall supplies are sufficient," said John Kilduff of energy hedge fund Again Capital. "As we've seen in the past, however, a well-supplied market is not always a barrier to very high prices."

    IEA: Market Tightening

    Naimi, who has previously spoken of $70 to $80
    The stone that the builder refused
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    we'll see $5 + by mid summer, if not earlier, then triple dip recession. yippeeee for foreign oil dependency
    A sad commentary on we, as a people, and our viewpoint of our freedom can be summed up like this. We have liberals and conservatives, Democrats and Republicans, yet those very people look at Constitutionalists as radical and extreme.................so those liberals and conservatives, Democrats and Republicans must believe that the constitution is radical and extreme.

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    I think not only will it not be $5gal, you'll see it under $3 soon after summer. Oil will fall back to the high 70's/80's with the removal of the fear premium.
    However, dumbass democrats should look at Saudi cutting supply when the Price is $108 and decide finally to get off thier nuts.
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    They must be expecting the price to crash. Top must be correct that the price will drop after summer. If they expected the price to continue to rise, there's no reason to cut supply. The price was going up at current supply. This is probabably good news in the long run.

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    The price was actually going down prior to the unrest in lybia, summer usually has weakening oil and gas prices. With a questionable world wide recovery and oil $20 inflated due to traders annuses slaming shut out of fear, a drop below $90 is not a wild guess at all.
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    Quote Originally Posted by tinfoil View Post
    They must be expecting the price to crash. Top must be correct that the price will drop after summer. If they expected the price to continue to rise, there's no reason to cut supply. The price was going up at current supply. This is probabably good news in the long run.
    That's a good point!

    Being honest though, I hate to admit it, but I hope it goes to $10(+) a gal. I'd love to see the system crash and all the public workers out on their ass.
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    many more private workers would be out vs public at $10
    The stone that the builder refused
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