Can't you hear it now? The drums and hosannas around the energy desk at the New York Times? The high fives, the back slapping. Their guys did it. The Saudis are going into high gear and are going to pump more oil. And all their buddies at the Times are going to make sure that we know about it, with blazoned headlines instructing us clearly "Plan Would Lift Saudi Output To Highest Ever" right there on the front page, June 14 first column right, for all to see and in feudal (sorry, check that) full homage to the Saudi oil princes.
To make us understand the profound sense of responsibility and shared pain emanating from the Saudis, the article goes on to instruct us that Saudi Arabia was uncomfortable with oil prices and quoted Saudi sources, "Our goal is to bring stability to the oil market."
Now that is a gracious and caring gesture, from a supplier who has brought the world's economy to the brink of ruin, causing untold damage to the daily lives of people through out the world, and placing a grievous burden on those least equipped to pay for the palaces, yachts, the princely and national boondoggles of the oil producing states of which Saudi Arabia is the chief cheerleader.
The irony, as always is lost on the New York Times and its editors forever at the ready to do the Saudis' bidding and to render them praise for such as being "concerned about record prices might eventually dampen economic growth" (the word 'eventually' is not a typo) when opprobrium would be more in keeping with the realities of events. Thus, Saudi Arabia is pictured as always looking after our interests. We are told that Saudi Arabia is pumping 9.45 million barrels a day as in May and with the new "increase" of 500,000/bbls the Saudis will be producing just about 10 million barrels a day, the "Highest Ever." Bravo for Saudi Arabia.
Both increases come after months of stonewalling the world community's pleas to increase production as prices were escalating dramatically. What the New York Times goes on not to tell us is that even with this increase, under Saudi Arabia's suzerainty OPEC's quota still has not made up the full 1.7 million barrels a day cut made in early 2007, and that, by some 400,000 barrels/day. Only 1.3 million bbls/day of that cut will have been reinstated: 500,000 bbls/day last November; 300,000 last month, 500,000 next month (a report has just come across the wires that according to Saudi Oil Minister Ali al-Naimi the increase for next month has been set at 200,000 barrels, not 500,000 barrels as reported by the NYTimes. Are you surprised?)
And by the way, in case you missed it, and in case you don't think OPEC and their production constraints don't have much impact on prices, and in case you feel the price of oil is determined by the unencumbered forces of supply and demand, or the erosion of the dollar -- (dollar index down about 25%, oil price up 160% over the period 1/07-6/08) please take note. Before the Saudi/OPEC cut in daily production quota by 1.7 million bbls/day in early 2007, the price for crude was in the low fifties compared to today's circa $135/bbl. Given their proclivities, if you asked the oil desk at the NY Times why this massive jump in price, they would probably attribute it to astrological forces.