Another Perspective on Oil Prices

Posted by Tim Hope on 5/12/08 10:56 am

With the price of oil making new historical records, some are making the case for continued price increases.  However, some analysts believe that Saudi Arabia may increase its oil production next year in an effort to gain favor with the new U.S. president.  It can be argued that such a production increase would help drive prices lower.  Consider that three new Saudi oil fields are expected to produce roughly 1.3 million barrels per day which would more than offset forecasted global demand growth of 900,000 barrels a day.  While it has long been said that “trees can’t grow to the sky,” it will be interesting to see if current oil price trends are sustainable.

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