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Lots Of Blame As Oil Prices Rise

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The Tampa Tribune

Published: January 16, 2008

Saudi Arabia has the world's largest oil reserves, but how much can it really ramp up production in the short-term?

Analysts say Saudi Arabia has the capability to boost production by up to nearly 2 million barrels a day, although the Saudis are leery of a major increase. Although a production increase would likely reduce prices in the short run, there are other factors driving up prices, including increased demand in booming economies such as China and India.

Is OPEC likely to boost production?

That's uncertain. Members of the Organization of Petroleum Exporting Countries blame rising prices on oil speculators rather than tight supply. OPEC decided to boost production by 500,000 barrels a day at September's meeting, but the increase did little to counter rising prices.

Is increased demand for oil - and not supply - the key factor driving oil prices now?

Yes. Many analysts think that economic growth in developing countries has helped produce a spike in oil prices even though there have been no supply shortages.

The Associated Press

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