Speculators Driving Up Oil Futures As Sources of Potential Supply Disruption Grow

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Oil prices at $40 per bar­rel are cre­at­ing a drag on the world’s econ­o­my as sup­plies remain tight in the world’s largest oil mar­ket, the Untied States. Sup­ply con­cerns fol­low the ter­ror­ist attack in Sau­di Ara­bia and fear of dis­rup­tions in Iraq when sov­er­eign­ty pass­es back on June 30th.

Background
Sau­di Ara­bia now pumps >8M brrls/day of oil, account­ing for some 10% of world out­put
Sau­di Ara­bia is only coun­try that can dra­mat­i­cal­ly increase pro­duc­tion in an emer­gency, to as much as 10.5M brrls/day
That role as sup­pli­er of last resort great­ly enhances the kingdom’s diplo­mat­ic pow­er and pres­tige




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