Blog
All hands to the pumps?
17th May 2008
The Financial Times reports today that Saudi Arabia is stepping up crude oil production by 300,000 barrels a day. And there are signs that other members of OPEC are starting to press for an increase in OPEC oil output as prices rise above $127 per barrel and the steep rise in oil costs hurts many developing countries. This FT article provides a bit more background on some of the tensions within the cartel. Saudi Arabia is often called a swing producer within the OPEC cartel - adjusting short run production to help the cartel meet its price targets / objectives. It seems that Saudi is justifying the new boost to output on the grounds of compensating for reductions in production from other OPEC members. Goldman Sachs has raised its average price projection for crude in 2009 to $148 a barrel.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.