Despite Saudi Output Increase, Oil Price Still high

The Saudi Arabia government has already went along with the US government's request in increasing oil output with a vision of resoluting oil problems in the world oil market, yet the price of oil is still hitting higher and hingher, now at above $142 per barrel. Was the oil output hike not suffice to lower oil price? What was really the solution to this oil crisis?



At the Jeddah meeting, Saudi Arabia announced it would increase output by 200,000 barrels per day but that had been flagged beforehand and so it did little to cool the market.

Oil: Oil prices jumped to record high levels above $142 on Friday as the US currency weakened further and stock markets tumbled at the end of a rollercoaster week for investors.

New York light sweet crude struck a historic peak of $142.26 a barrel and Brent North Sea crude reached an all-time high of $142.13.
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PAULSON: Oil Prices a Burden On Global Economy

US Treasury Secretary, in its upcoming trip to Middle East, is planning to promote foreign investment in oil production so that oil supply will boost. As part of his visit to Mid-east countries, Paulson is planning to tell the officials of Saudi Arabia and other oil-rich countries that the current soaring oil prices pose a significant burden on global economy.

"The key message that he will highlight is that record high oil prices are putting a significant burden on the global economy. They are also putting a significant burden on families and consumers, not just in the United States, but around the world," McCormick said in a briefing to preview Paulson's weekend trip.

McCormick said Paulson would be urging "all countries to open up their oil markets to investment that boosts yields, exploration and production." He said that message would not be aimed at any specific country but to all oil producing nations because a significant number of them are "walled off to private investment."

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