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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (29419)	5/13/2002 3:10:04 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 281500

<it is still suggested every 1% decrease in oil output longer term, adds 10% to the top line price of crude.> KC, so, if oil production drops 20%, that would be $23 + 10% +10% ... 20 times to $154 per barrel. So, it is suggested that whoever came up with a 1% decrease in production increasing crude oil price by 10% come up with another idea. At $30 a barrel, oil starts being replaced to a great extent by other energy sources, including production from other more expensive places than Saudi Arabia [which has such low production costs that it is uneconomic to produce oil elsewhere while Saudi oil is available]. Even at current prices, the share of middle east oil will drop as Russian and other production increases and people continue to find ways of avoiding using oil. The oil price range is $10 to $30. Above $30, GeorgeW's Texan Tea buddies are giggling like maniacs [and bemused that Arabs cutting off oil is supposed to worry the USA - the USA is very happy with expensive middle east oil because it keeps the USA oil producers in business and rolling in it - tough for the SUV crowd]. Below $10 they are whining like a fleet of 747s and they'll demand another war in the middle east again Saddam and anyone else who has oil. Above $30 many replacements for oil flood the markets and Saudi Arabia loses market share quickly. Saudi Arabia does NOT want oil to get too expensive. Mqurice