Saudi Arabia's growing thirst for oil as their citizens buy cars is creating a problem

I don't like this move. The strategic reserves are for supply issues, not price issues. Not that I want to see the economy suffer, but this seems to set a bad precedent. The other two instances of this action were the first Gulf War, and Hurricane Katrina.

The idea that it has to do with Libya doesn't seem to hold up, as the amount of oil to be released is greater than what Libya supplied.. plus Libya has been partially offline for 4 months, and they're just taking action now? When they did it after Katrina, it took 4 days..

 

^ first time I think I agree with you. The prices are falling as it is. Just another screw up from the administration.

 

funny thing they have a 2.0L engine size limit, and no Tier 2/Bin 5 draconian limits on diesels

 

It couldn't be that we are using too much oil, it's gotta be that the supply isn't sufficient.

Just like the car is too small, not that the operator is too big.

I think the only reason they are releasing any oil is partly due to the fact that supplies are rediculously high. How about rather than release them, we just don't increase them any further for awhile? If refineries here are running roughly 90%, what do they plan on doing with all the oil they release anyway?

 

they likely do not have own production capacities, they have to import final product (gasoline, motor oil, etc)

 

Which administration?

 

I don't think this is at all proof that oil capacity is low. Iraq is still being reconstructed, libya is offline, there is still plenty of oil. SA just doesn't have enough for their politics. A more cynical me sees this story as SA wants its own nuclear weapon and wants to build nuclear plants to get expertise and a cover to develop a bomb, to counteract Iran's possible future bomb. If they just wanted more electricity there is plenty of wind and sun in the kingdom, that they are not exploiting.

 

Bad move, we are burning our strategic reserve for political reasons just at the time risks are increasing, and the need for the reserve is greater.

OIL FUTURES: Oil Plunges On IEA Plan To Open Strategic Reserves - WSJ.com

I read we want oil prices lower so people drive more this summer.

 

Since Bernanke did not offer QE3 yesterday, we got SP3 instead.
I made that 3 up, is this the 3rd time we tapped into it Strategic Petrol Reserves?

 

Its SP5 -
1985 - Test
1990-91 Desert Storm - strategic reason
1996-97 Deficit reduction
2005 Katrina
2011 Libya

So out of the 5 uses 3 seem questionable.

 

Agreed they only want nuke weapons.
The story is total BS.
The pop is 20 million.At least 10 million dont drive. Im referring to the women.
They mostly dont really have jobs.They dont need to commute .
The rich ones have dozens or hundreds of vehicles,but only drive one .The poor Saudis have camels and dont travel much.The middle class have cars but were talking maybe 5 million middle class males.
Miniscule compared to world consumption.
To another poster , there are about a dozen refineries in Saudi.
BTW They may say its to defend from Iran,but they all hate Israel with a passion.

 

Personally, I think the last 4 are questionable if not outright abusive....if we're going to call it a "strategic reserve." Buuuut....it's not my oil.
I can get by on veeeery little gas and I have my own 'strat reserve.'
I don't have much rudder input on what my beloved government does with it's own reserves. Last time I checked the phone.....NCA wasn't trying to get a hold of me for sage advice.

Saying that the folks in the NAG are "thirsty" for oil is like saying (former) Congressman Weiner is "thirsty" for negative press coverage. They both have allllll they need.
Saudi's "thirst for oil" can be easily slaked by simply increasing their own production. Come to think of it....I wish they would.
Gas prices would fall and then G3's would go back on sale. My Commander in Chief would see a nice bump in his poll numbers too.
(Good or bad...that's your call.)
Of course....then Saudi's cash flow would drop off somewhat, which is what they really have a thirst for, and is probably the real problem that they're trying to solve.
Gasoline prices have been dropping of their own accord because demand has been sliding off...caused by high prices, and the sputtering, coughing economy. Fix the latter by tweaking the former, and then when demand rebounds they can stick it to us again.
It's worked before.

 

You Know..The one thats gonna change everything.

 

Lather, Rinse, Repeat.

 

Actually, considering how much time they spend drifting on the streets of Riyadh they probably punch well above their weight.

Part of the increase may be from the energy sector as much as the transportation sector.