Saudi Arabia is hosting a global oil summit to address high prices, and CNBC asked the experts what impact, if any, this summit could have.
“I’m looking for three things out of them [Saudi Arabia]…to come up with a substantial increase in production. I know the number out there is 200,000...it could be a much higher number than that at the end of the day. It could be as high as 400,000 or 500,000 barrels. Also, they need to discount significantly their heavier, sour crude so it’s more attractive to refiners that are struggling in a bad profit environment right now…and finally, they need to come clean about what their productive capacity is now…If they come out with that triple play, there could be some impact.”
“[Oil] will probably be cheaper [next month], because Saudi is going to call on consuming nations to do something, like what China did yesterday in terms of reducing subsidies and contracting this demand.”
John Kilduff, MF Global Energy Analyst
“The fact is that OPEC has very little spare capacity, and so if they opened all of their valves it wouldn’t make that big a difference to the world. The other thing that people don’t seem to understand is that every year there are oil fields that are producing oil that are going into decline, and so to just stay even, which is what we’ve been doing for the last few years, we have to produce between three and four million new barrels of oil each year.”
Robert Hirsch, Management Information Services Inc. Senior Energy Advisor
“I really don’t see much coming out of this meeting. In fact, the big news, you guys [CNBC] already announced it about a week and a half ago…with the 500,000 barrels, so the news is already is in the market and it’s really having no impact.”
Chris Jarvis, Caprock Risk Management