Pretend You Meant To Do That
Saudi Oil Exports to US Lowest in 21 Years From Emirates Business
Oil giant Saudi Arabia is gradually reducing crude oil exports to its largest trading partner the United States as it is pushing deeper into China and other fast-growing Asian markets, according to official data.
A decision by Washington to limit its hydrocarbon imports from the Middle East and other Opec producers also contributed to Riyadh cutting down on oil supplies to the US market to their lowest level in more than two decades.
Estimates by the Energy Information Administration (EIA) of the US Department of Energy showed Saudi Arabia's crude exports to the US plummeted to about 837,000 barrels per day in November, their lowest level in 21 years.
Saudi Arabia's crude exports to US have remained above one million bpd for most of the years in the past three decades as the two countries had maintained strong political and economic relations. But they have started to decline rapidly over the past months because of Opec quota restrictions on Saudi oil output, plans by the US to cut hydrocarbon imports from the Middle East, strained ties between the two countries and a drive by the kingdom to expand its exports of oil and other products to the Asian markets.
Of course the US Government has decided it wants to restrict imports... Of course OPEC is in charge... Why would they say otherwise? That would make the players look weak.
And worse, would suggest that the US doesn't need a growing or even a flat supply of oil. A declining supply of oil is exactly what the USA needs.
But that's more of an indicator of how badly our economy is declining. If it were healthy, consumption of oil would be increasing.
But in spite of the decline in oil consumption in the US, the price remains high and is trending upwards.
Now the media loves to blame speculators on every price move. And of course a lot of folks on the internet parrot this line. But it's good to note that speculators have the biggest impact when supply and demand are tight. If supply exceeds demand, then we get a pricing slump. If they are even, we get oscillations in pricing. This is the point where the efforts of speculators become amplified. When demand is higher than supply and price is rising, the speculators pile on.
It's important to note that their is a relationship here. The speculators pile on in response to the price signals, that begin with demand closing in on supply.
So soon, we'll hear lots of happy media talk about how speculators are driving up the cost of gasoline at the pump.
Exciting times are coming!