What a Surprise
29 January 2005
Reuters. OPEC oil producers are considering possible advance measures to head off a price drop after the northern winter, the cartel’s president said on Saturday.
Concerns among OPEC nations about the detrimental impact of prices near $50 a barrel on world economic growth and fuel demand appear to have evaporated.
Saudi Arabian Oil Minister Ali al-Naimi said on Saturday that he believed the modern global economy was too large and strong to be blown off course by the price of oil.
Asked whether he thought $50 could be a barrier to growth, Naimi said: "Really it’s not, the world economy has grown so big that little fluctuations in oil are not doing so much.
“Little fluctuations” that dropped $106 billion into Saudi coffers last year. Really, what’s a couple of hundred billion among friends?
Sarcasm aside, what else would one expect? As al-Naimi correctly notes, the economy has yet to be seriously derailed by $50/barrel oil and demand is continuing its strong growth (China, US and elsewhere). With non-OPEC production stagnant or dropping, the world is becoming again increasingly reliant on the extra supply that OPEC promises it can provide.
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