The oil market is like a poker table. Hedge funds, investment banks, Big Oil, dictators, sheikhs, speculators and western politicians – everyone tries to get the other players’ money.
Ali al-Naimi, Saudi oil minister, told journalists that current oil prices are too high. He took measures to bring the prices down. Saudi production is currently at 10 mb/d, the Saudis will ship 22 VLCC (Very Large Crude Carriers) to the US. The usual number of these shipments to the US is one ship every two months. So the FT described this as “a wall of oil” moving towards the US Gulf coast.
So we know what the Saudis are up to.
President Obama is under pressure from the Republicans as prices for gas are surging in the US. The Republicans blame him for that.
Japan has shut down almost its entire nuclear capacity after the Fukushima incident and is currently burning oil and gas to generate enough electricity. Power producer Tepco recently raised its prices by 17 percent.
France and the UK are also suffering, the UK from its austerity and France from a lack of competitiveness and the Eurozone crisis.