Saudi's claim global oil market 'oversupplied' - cut production

In the face of $4 gallon gasoline and $105 bbl crude oil Saudi Arabia has cut back production because the market was 'oversupplied' and global demand was 'weak'. We think otherwise.

Investors using the 'Kelly formula" to allocate investments should do very well here - we are entering a "New Era" in the oil sector in our opinion:

http://www.lsgifund.com/index_files/Page960.htm

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landownerPermalink Reply by P.G. on April 19, 2011 at 2:45
I wonder how much pressure our president is putting on the Saudis to not cut production?
Permalink Reply by Wilma Watts on April 19, 2011 at 2:51
I sort of wonder if Saudi's have any excess capacity, that they are maxed out now ?

Oil & Gas ProPermalink Reply by The_Baron on April 19, 2011 at 3:01
The oil supply in the US is up, Cushing is slap full.

landownerPermalink Reply by CypressKnees on April 19, 2011 at 3:14

Dear Baron,

The Okies say there are not enough pipelines to the Gulf Coast refineries. Is that true?

Thank you and I am sure you are rolling your eyes.


Oil & Gas ProPermalink Reply by The_Baron on April 19, 2011 at 9:02
Yes Cypress, There is far more in than out right now. Mostly due to Canadian oil coming in.

landownerPermalink Reply by P.G. on April 19, 2011 at 3:15
Why aren't prices reflecting it?

Oil & Gas ProPermalink Reply by The_Baron on April 19, 2011 at 9:02
Speculators are placing a high risk premium due to mideast unrest.
Permalink Reply by Wilma Watts on April 19, 2011 at 5:28
I think the saudi's oil is heavy sour, difficult to refine. And the Cushing inventory can't get to Texas to be exported. So maybe that explains some stuff.

landownerPermalink Reply by essay on April 19, 2011 at 6:06

saudi's oil is heavy, that was part of the whole thing with them "replacing" libyan light sweet.  really puts a crimp in refining margins i would imagine, not to mention messing with gov't mandated emissions requirements.  i think a bunch of that "replacement" crude was met with a "thanks but no thanks" from many of the european outfits, even after the saudis had blended it

 

i also think we're facing the very real possibility of the economy being stifled by sustained high fuel prices this summer in the u.s., we're within 40 cents of the june 2008 top and it's not even may yet.


landownerPermalink Reply by P.G. on April 19, 2011 at 6:23
Still trying to figure out why crude is so expensive if there's supposedly a surplus from lack of demand..perhaps there's a good demand for the easy to refine oil but what about the rest?

Oil & Gas ProPermalink Reply by The_Baron on April 19, 2011 at 9:04

Speculators. Risk Premium. Inflation. weak Dollar. Poor Economic policy by US Gov.

 

Take your pick


landownerPermalink Reply by Max on April 19, 2011 at 10:51

Did anyone read the entire article posted above? 

 

Speculators.

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