Prices Are Down, but Saudis Keep Oil Flowing

OPEC leader Saudi Arabia has been slowly but steadily increasing their oil production despite the fact that oil prices have been hovering around $60 a barrel. This leads leaders to believe that the meeting of OPEC that will be taking place in Vienna this week will create no lowering of production levels like those that are wanted by some smaller OPEC industries. The unwillingness of Saudi Arabia to lower their current production most likely stems from two different places. Firstly, Saudi oil producers are seeing countries like the United States becoming bigger producers of oil and thusly are becoming less reliant on foreign oil. This has caused them to maximize their sales in those countries before their markets began to close up for good. Secondly, as the oil trade has made Saudi citizens more wealthy they have become more integrated into the middle class. This has made their consumption of oil to skyrocket and this in turn has made it necessary for local producers of oil to increase productions to keep up with demands.

-Kevin Nalefski

http://www.nytimes.com/2015/06/01/business/energy-environment/prices-are-down-but-saudis-keep-oil-flowing.html?ref=world&_r=0