Saudi Arabia calls for emergency summit as oil prices soar

[phantom power]

Saudi Arabia today called for a summit of oil producing countries and consumers to discuss how to prevent oil prices from soaring further, following last week's surge to a record high of $139 a barrel.

The country's Information and Culture Minister, Iyad Madani, said that the kingdom would work with OPEC to "guarantee the availability of oil supplies now and in the future".

(...)

Saudi Arabia is the only OPEC member with spare capacity to boost output quickly and significantly. Consuming governments have put pressure on the organisation, members of which supply more than a third of the world’s oil, to boost output to ease the effect of high prices on their economies.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4099716.ece

[DJ13]

1. "Saudi Arabia is the only OPEC member with spare capacity"

So its said by OPEC, but the other OPEC countries in the past have shown an ability to cheat on quotas when they wanted to, so that may be just an empty bit of PR.

[FightingIrish]

2. God forbid the oil junkies find a cure.

I think the Saudis see that the global victims of dependence on century old technology are about to wake up.

[Cleita]

3. And this benefits them how?

Isn't OPEC the cause of all this?

[phantom power]

4. Many people assume so....

but my opinion is that OPEC is no longer in control of events. The only lever they ever had was how fast they put oil on the market. The problem is, that world demand now either exactly meets or slightly exceeds the rate at which they can supply the market. So, their lever is gone.

Unless one believes that they are willing to risk global financial collapse in the name of selling oil at $125/barrel. I personally don't think so, but opinions differ.

[DCKit]

5. Current prices are unsustainable.

If they don't get the price down, alternatives are going to start cutting into their business.

Many types of alternative energy become affordable and competitive with oil at $60/barrel. At $138, all bets are off.

We've already seen an increase in the number of people turning to mass transit, bikes, scooters, smaller cars, etc.... OPEC can't afford to let this go on lest the world finally realize they're unnecessary.

At retail prices, a conventional solar system has a return on investment of about twenty years. With rebates and tax incentives - CA has the most generous programs - that ROI drops to between seven and ten years. Double the price of electricity and you halve the ROI again.

Despite the detractors and the Nnew-cue-lur fond'a-mentalists, average Jane and Joe Sixpack are beginning to realize that they're being held hostage by energy corporations and independence can be a reality.

[Zachstar]

6. I HIGHLY doubt they can get it down to 60 USD even if they tried.

This is not 1985 China just keeps growing and growing and the only thing that is slowing down that growth is fuel. And they are already working on ways to get more coal 2 fuel. Meaning there is still HUGE demand already.

So the moment oil prices drop those who have been priced out and china will start buying BIGGER amounts and then before we know it we are right back at 120 except this time every pump is running 100 persa