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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.
January 29, 2005 in Oil | Permalink | Comments (1) | TrackBack (0)
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Posted by: Aaron | February 01, 2005 at 07:43 AM
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Good, let OPEC keep thinking this. Color me a cynic, but I think the only way that a fundamental shift in consumer thinking (and spending, i.e. car buying) in this country will come via a monetary (market driven) push versus an environmental one. Most people don't give a crap about breathing dirty air that will kill them some day, but take just a smidge more money out of their wallet and they are up in arms (heavy sigh from me).