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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: 007 who wrote (23300)	6/2/1998 10:18:00 PM
From: Broken_Clock	Respond to of 95453

That scenario works fine for the Saudis as long as they can pay their debt, which is currently over 70 billion, as I recall.

To: 007 who wrote (23300)	6/2/1998 10:36:00 PM
From: marc chatman	Respond to of 95453

It also wouldn't make sense in that S.A. agreed to (actually led) the last round of production cuts [unless, of course, they knew the cuts would not be maintained].

To: 007 who wrote (23300)	6/2/1998 10:46:00 PM
From: mph	Read Replies (1) \| Respond to of 95453

James: Do you really think they're smart enough to have this great big conspiracy? That's usually the problem with conspiracy theories. No one is smart enough to pull off the ones everybody identifies as supposed conspiracies. It's kinda like the OJ Simpson case. The defense was that the LAPD was a bunch of morons who couldn't handle evidence properlu to save their souls. At the same time, they had this immensely complicated conspiracy to frame OJ. The only way that could have been true would have been if Mark Furman were the killer! Based on no empirical evidence and IMHO only, I don't think the Arabs are deliberately angling for single digit oil. Just my two cents. mph (aka Q)

To: 007 who wrote (23300)	6/3/1998 1:12:00 AM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

I think the Saudis are probably smart enough to come up with a better conspiracy. Generally, a conspiracy at least has some plausible motive. Exactly why would Saudi Arabia want to sell more oil for less money? To be more popular with their customers? A more likely conspiracy would be the Iraqis accusing the Saudis of such a dumb plot in an attempt to make them look even more lame than Saddam Hussein or the members of his family he has posing as geologists. Actually, the ones most likely to hatch a deceptively unfathomable conspiracy like this would be Pentagon or CIA-types. They might have the requisite blend of abundant paranoia and budgetary unaccountability to be able to dream up a conspiracy that could make enormous sums of money mysteriously disappear for no apparent reason. Baird

To: 007 who wrote (23300)	6/3/1998 5:23:00 PM
From: Gator II	Respond to of 95453

So an Iraqi geologist a couple of weeks ago had the same view (Saudi's maintaining "blue light special" on crude), that the Saudis would love to see oil in the single digits so that they are the only ones left standing. Hmmm! You wrote: "I told him that that didn't make sense to me because the increase in volume wouldn't make up for the lower prices, and once prices did rise again, e & p would just resume in the other countries." Well, FWIW, I, too, agree with you and all the respondents who stated it didn't make sense for the Saudis to allow crude to fall to single digits. However, at the risk of being accused of being a conspiratorist, I would point out that Russia allegedly has the greatest reserves of oil in the world, perhaps even greater than what Saudi Arabia has. Who can argue that they have not been brought to their knees the past several months (may have happened anyway) with the fall of world oil and gold prices. Maybe the Saudi's ARE smart as foxes and ARE following a plan. All I was and am still suggesting is the possibility that the Saudi's may believe it would be worth the short term fallout to DELAY all the drilling programs worldwide (for whatever reason). In particular, the drilling currently underway or on the drawing boards in those countries that make up the old Soviet Union who pose a threat to the Saudi's dominance of OPEC and what remains of that cartel. Further, around the world, by letting oil prices fall near term, other programs have and are being delayed and/or are being reexamined in light of lower oil prices. Six months ago, we were all being warned that if crude stayed south of $15 a barrel for six months, E&P budgets could be affected. Well, it is and they are. Of course, the Saudi's knew that OPEC member states would cheat on the recent roll back of quotas. And, yes, they owe 70+ Billion, but regardless of short term debt service, does anyone doubt that lenders wouldn't roll over their loans if asked (considering the collateral which exists beneath the sand in the Mid East)? Consider, too, that if they default, from their viewpoint, so what? Eventually, they will pay and their creditors know that. And, yes, E&P expenditures would increase substantially to produce more after the shock of excessively LOW prices. But, short term objectives, whatever they maybe, might be accomplished, at least from the Saudi's viewpoint. Does this scenario make any less sense then the one which resulted in gas lines, alleged shortages, etc in the early 1970's. I submit it didn't make sense then and the one I have outlined here doesn't either but the first one happened and maybe we are giving the Saudi's more or less credit then they deserve, depending upon your viewpoint. Perhaps we will know more after the next Oil Minister's meeting. Personally, I agree that it is implausible the Saudi's are intentionally attempting to push down oil prices for whatever reason, but I still have that nagging feeling that, maybe.... Gator II