Saudi decision to raise oil output will increase the oil price to $200 a barrel – Gas prices to $7 a gallon?
Joe Weinman
Jun. 23, 2008

Strange as it may sound, an increase in oil output by Saudi Arabia will not lower price oil much in the short run and as a matter of fact it will guarantee a $200 a barrel oil in the long run.

Saudi Arabia's King Abdullah announced on Sunday that his country has increased output to 9.7 million barrels a day as he opened a summit on the soaring international price of crude.

Saudi Arabia will also give USD 1 billion to an OPEC fund for developing countries and USD 500 million in soft loans for poor countries to finance energy and development projects, he said.

This Saudi move is an excellent trick. The oil producers now will make the rest of the world economic slaves by lending these nations billions of dollars. As they lend the money, the poorer nations will actually increase the oil consumption and that will in turn raise the price of oil. There are little signs from India and China that there will be lower oil demand in those hyper-inflated economies.

The gas price will eventually get to $7 or more a gallon within eighteen months unless US Government releases oil from strategic reserves.

The Bush Administration allowed oil speculation by not releasing oil from the strategic reserves. The Saudis are playing excellent trick. On one hand they are increasing the output to increase their profit and on the other hand they lending the same oil money so that oil consumption can go up bring them more money to lend.

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