Food and Fuel America.com: Saudi Arabia Promises More Oil But Prices Rise Anyway

Monday, June 23, 2008

Saudi Arabia Promises More Oil But Prices Rise Anyway

Maybe Saudi Arabia fears America will really move from an oil-based economy. Or they know that their vow to increase output will still keep the money pouring into the kingdom. Whatever their real motivation, they now think there's a "a problem" with the high price of oil

So on Monday, they vowed to increase output a modest additional 200,000 barrels per day. Saudi King Abdullah blamed several factors for higher oil prices, including speculators, increasing consumption in developing economies and high petroleum taxes in consuming countries.

So on all of that good news, world oil prices increased anyway. August Light Sweet Crude rose $1.38 and closed at $136.74 a barrel on the New York Mercantile Exchange.

But the pain at the pump for American consumers also remains high.

According to the US Department of Energy, the average retail price for gasoline is $4.079, up $1.097 from a year ago at this time. The average price for detail this week is $4.648, up 1.813 from a year ago.

Quite literally, the oil producing countries have us over a barrel. And a mighty expensive one at that.

Source: Royal Embassy of Saudi Arabia, Nymex.com, Department of Energy

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