Saudi Arabia is the one that has conspired with other countries to manipulate price. So you take their word? The other issue is the quality of Saudi oil. Saudi oil is heavy oil where Iran is lighter. European and Asian countries are hoarding high quality light oil. Even if the Saudis match Iran, barrel for barrel, that is not enough. Most European refineries cannot refine Saudi crude. That is why they are hoarding lighter grades. On top of this, other sources of light crude are compromised. North Sea Crude production has had problems. Plus you have a war in the Sudan and problems in Nigeria. A war in Syria as well.
5) And the one I Iove the most. When Obama was running for president he identified speculation as the source of the problem and said he would fix it. Well we know what really happened! LOL. Speculation is not the problem. Obama has killed the messenger and in doing so he may end up destroying the free market. Government intervention in the market can have unintended consequences. Like in the 1970’s when we ended up with gas lines and shortages.
A great disservice is being done to America by those who blame speculators for price movements when they lack the knowledge to grasp the fundamentals of the marketplace. Remember what role the speculators play in a free market. They assume risk and today they are assuming greater risk than perhaps at any time in history. We are contending with actual wars and the threats of new ones springing up. We have countries and financial institutions across the globe that are failing. Central banks around the world are promoting money to stimulate "speculation" so economic activity does not freeze and we don't slip in to depression. If speculators were actively in the market and assuming risk, the global economy could collapse.
The Wall street Journal also said that oil came under pressure as the Bank of Korea lowered its 2012 growth and inflation forecasts. Asia’s fourth-largest economy will expand 3.5% in 2012, compared with the 3.7% estimated in December, the central bank said today in a statement.
South Korea’s Finance Minister Bahk Jae Wan urged members of the Group of 20 nations in a letter to address the increase in crude prices at their meeting in Washington next week.
New York crude has technical support along its 100-day moving average at around $101.73 a barrel today, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support.
This is the week that we should start to see gas supply turn around. Look for crude to fall 1 million barrels. Look For gasoline supply to increase by about 2 million barrels. Distillate supply should increase by one million barrels. Refinery runs should increase by 1.0 percent.