Sunday, June 22, 2008

Saudi Arabia increases oil output after UN pressure

1 comment:

Peter D said...

Increasing oil output is unlikely to appreciably affect the high gasoline prices we are experiencing, or even the price of oil. While the price of oil may be high, the cost of production is also high. This is because the dollar is experiencing a pronounced devaluation. Producers cannot give the oil away, i.e., sell it for less than the cost of producing it. The purpose of pummeling producing nations to increase their output is merely an attempt to divert blame from the real cause, a global collapse of currencies, led by the dollar. There is a rush to the doors, as investors exit dollars and put their money in commodities such as metals, oil and agriculture. While these investors are often called "speculators," they are just doing what any rational person would--attempting to hold on to the value of their assets.