CAIRO, Egypt (AP) -- Saudi Arabia said Saturday that it hoped to raise oil prices to $75 a barrel, but indicated that no measures would probably be taken until an OPEC meeting next month in Algeria.
Saudi Oil Minister Ali Naimi said that OPEC will "do what needs to be done" to shore up falling oil prices when the cartel meets next month in Algeria, even as his king told a Kuwaiti newspaper that $75 a barrel was a fair price for oil.
It should be interesting to note that when Bush took office, the Saudi's were happy with $ 22 a barrel and reported that fact to the news. It was Bush that wanted to see the oil price really bloom, and thus create a fake oil crisis. Bush and the GOP have brought the nation to the doorstep of economic ruin with deregulation and oil price gouging so I very much doubt that $ 75 a barrel for crude right now would help the US economy, rather than further damaging the financial system.
The UK's Telegraph is reporting that Russia may join OPEC.
Other new sources of oil include the Canadian tar sands in Alberta. This oil also costs significantly more to turn into crude than traditional sources – maybe as much as $75-$80 a barrel. This is because the tar sands are extremely viscous. They do not flow like normal oil, so they have to be strip-mined or injected with steam. This uses significantly more energy and water.
So, with the oil price now at $54, many producers will be feeling severe pain – especially when they have become accustomed to receiving massive piles of petrodollars throughout the oil price spike.
According to research by Deutsche Bank, Venezuela needs to see oil at $95 a barrel to balance its current account. Saudi Arabia needs oil at $55. The falling oil price is also crippling the Russian economy, so much so that the country may even start co-operating with OPEC in a formal basis.
Russia may end up using the Euro too, as a basis of funding for whatever new alliance they make with Mideast oil price fixing endeavors. And of course, wherever price fixing is found, there is now a growing piracy problem too.
"Reporting from Beirut and Nairobi, Kenya -- In their most brazen raid yet, suspected Somali pirates operating deep in open waters have seized an oil tanker as long as an aircraft carrier, the U.S. military in the Middle East----"
"---- The Liberian-flagged Sirius Star, one in a class of ships that stretch longer than three football fields and can carry 2 million barrels of oil, is also the largest vessel yet to be attacked by pirates, said Navy Lt. Nathan Christensen of the U.S. 5th Fleet."
It all seems to come down to one of two events that will happen during Barack Obama's term in office, either gasoline price gouging will continue, causing the US to fall deeper into depression or we'll go back to buying cheap Mideast oil like we did during the Clinton Administration. Personally, I think that depression maybe the only key to moving the nation away from fossil fuel dependence for good, as adversity is often the mother of invention. And, as we've already seen, Obama talks big about his plans however he has shown a striking enablity to actually stand up to corporations. There is no middle ground in this area, as Barack will either do it or he will not do it. Obama is a gifted speaker, although I'm afraid that Obama has no fortitude to actually accomplish anything he promises to do. The FISA Bill was all anyone needed to see, to understand that Obama, like Bush, will give corporations whatever they want, and then lie to the American people about what he is doing.