SOME RELIEF FROM INCREASING OIL PRICES? 2
An article in the New York Times (14 June 2008) reported that Saudi Arabia, the world’s largest oil exporter and the US’ second largest source of crude, announced that it was increasing its production level by 500,000 barrels per day.
This move of Saudi Arabia is not entirely a response to the economic problems of countries reeling from the high prices of oil. Even as oil exporting countries are already riding the crest of record profits from oil, this increase in production level will generate even more profits on top of record profits. This is the market mechanism that economists speak of: in maximizing profits, market players move towards an equilibriium that redounds to the benefit of the economy.
Hopefully, other oil exporting countries will follow business logic and contribute to an increase in world supply that will quench the thirst for fuel and stabilize oil prices.
Will an increase in the world supply of fuel arrest the increases in pump prices? What do you think?
image from Microsoft Clipart, reconstructed by Ren Garcia
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Check out what others are saying about this post...[...] Financial Trend Blog wrote an interesting post today onHere’s a quick excerptSOME RELIEF FROM INCREASING OIL PRICES? 2 An article in the New York Times (14 June 2008) reported that Saudi Arabia, the world’s largest oil exporter and the US’ second largest source of crude, announced that it was increasing its production level by 500,000 barrels per day. This move of Saudi Arabia is not entirely a response to the economic problems of countries reeling from the high prices of oil. Even as oil exporting countries are already riding the crest of record profits from oil, this [...]