Tuesday, September 14, 2010

Phil Flynn: OPEC Divisions

In a world awash in crude supply OPEC has had it pretty darn good. The cartel that always puts its own interests first seems to be getting a little testy with each other as the competition for a declining market share may be causing some tension. This behind the scene squabbling may have come out in the open when Reuters News and the Globe and Mail reported that Saudi Aramco, the Saudi State oil company chief executive Khalid al-Falih, declared that global oil demand has bottomed and the state owned giant stands ready to increase production when more is needed.

The Globe and Mail quoted him as saying, "We believe that the market has bottomed in terms of demand and has already begun picking up," he said. "And Saudi Aramco will be responding to the economic recovery that has ensued with appropriate adjustments. But those will be determined collectively and not singly, either by the company or by the kingdom." Of course when the Saudis speak the market listens yet at the same time are they sending a message to other members of the cartel that the kingdom is tired of holding back on production while others profit by taking their market share. Early this morning the OPEC Secretary said in so many words.....Read the entire article.

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