It is no secret that President Obama’s reelection hinges in part on gas prices in the United States. Republicans have made a point of emphasizing that Obama’s energy policy is part of the reason behind high gas prices. Republicans often cite the president’s decision not to allow the Keystone XL pipeline as evidence to support their argument.
Now Saudi Arabia is coming to Barack Obama’s aid. The Saudi Council of Ministers, the cabinet, has declared that it wants to return oil prices to fair levels. Saudi Arabia has been emphasizing that it would like oil prices to return to $100.
There have been reports that the Saudis have been hiring a number of super tankers. Such reports have helped prices of some tanker stocks such as Frontline Ltd. Ordinary Shares (FRO) and Nordic American (NAT).
The oil ETF (USO) is down on the reports. Saudi efforts to reduce oil prices come in the wake of warnings from Iran to not increase oil production. If Saudis increase oil production, it will offset the exports of Iranian oil which have been curtailed due to the United States and European sanctions. Iran’s mullahs have a strong vested interest in Saudis not increasing oil production.
President Obama is scheduled to give a speech on energy on Thursday in Cushing, Oklahoma.
Cushing is the oil tank farm capital of the United States. It’s a major hub where various pipelines converge. Cushing is the price settlement point for West Texas Intermediate Sweet Crude Oil on the New York Mercantile Exchange (NYMEX). NYMEX is now owned by CME Group (CME)…..Read more at Forbes