One does wonder.
Exactly how high do oil prices have to rise before Saudi Arabia will start using it supposed three million barrels of spare capacity?
Does Saudi Aramco intend to stay on the sidelines watching Brent crude prices - already $120 per barrel - climb as high as $200 (U.S.) per barrel, while blaming speculators for distorting market fundamentals?
Or is the emperor simply wearing no clothes? Is Saudi Arabia, and by extension, OPEC, already tapped out, barely struggling to make up for the loss of 1.3 million barrels of oil exports from a now non-producing, war-torn, Libya.
Even less credible than the country’s official estimates of its reserve capacity is the notion Saudi Arabia could bring down today’s triple digit oil prices but instead chooses not to
No country in the world is more dependent on a healthy global oil market than Saudi Arabia, which pumps out nine million barrels a day. And it is no mystery a further increase in oil prices will lead to another oil induced recession and a subsequent collapse in world oil demand and prices.
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