Over the weekend, Saudi Arabia called an oil summit aimed at identifying the reason for persistently high oil prices. The summit ended with little in the way of an explanation other than blaming speculators and a pledge of sorts to pump an additional two hundred thousand barrels per day.
Mainstream Media outlets in the US immediately jumped on this as another in a growing line of reasons for the price of oil to fall. Barrons’ piece stood out in particuar to me as more wishful thinking than anything else.
“In the next decade, oil indeed may hit $200 a barrel. But prices could fall to $100 a barrel by the end of this year if Saudi Arabia makes good on its pledge to increase production; global demand eases; the Federal Reserve begins lifting short-term interest rates; the dollar rallies, and investors stop pouring money into the oil market. China raised prices on retail gasoline and diesel fuel by 18% Thursday, in a move that is expected to curb demand.” Read the full story here:
I counted no less than 5 conditions that will need to be met to see oil fall to $100 in their opinion. It reminded me of an old tag line that goes something like if ‘ands, ifs, and buts were candy and nuts, we’d all have a Merry Christmas”
At least so far, the oil market is not impressed with either Saudi Arabia or Barrons. Spot oil prices are up $1.87 at $137.23 as of noon EDT.