Plan Would Lift Saudi Oil Output

The world’s biggest oil exporter is increasing production this summer to its highest levels in history – and New York Times reporter Jad Mouawad suggests it’s a signal that Saudi Arabia is nervous about the growing furor over rising oil prices and demands for new sources of energy. Governments around the globe blame rising oil prices for hikes in food prices and increasing unrest. The Saudis resisted previous requests by US President Bush to increase production and blamed speculators. But prices have jumped quickly in recent months and consumers recognize the dangers of depending solely on fossil fuels. “The measure carries some risks to the kingdom and is not guaranteed to bring down prices, analysts said,” explains Mouawad. “Some investors doubt that Saudi Arabia has the capacity to increase its production beyond its current levels.” A limited supply of energy guarantees high prices for oil producers. But the producers would prefer a slow and steady climb in prices so that consumers don’t notice and rush either to conserve or to seek substitutes. – YaleGlobal