I don't think the Saudis can increase output even if they wanted to. They are pumping all out to keep the price under $100. The price of NYMEX crude will spike if the US inventory # shows a larger than expected draw tomorrow.
E&P's have to drill deep water in order to find meaningful new supply.This in a nutshell is the investment case for RIG.
hemano8, One must take into consideration that OPEC does not want crude prices to be too high too long as high crude prices will encourage oil consuming nations to develop alternate energy sources. OPEC wants us to continue our addiction to oil. In short, deep water oil drillers are an excellent long term investment.
I agree - the Saudis don't want oil over $100 which is why they are pumping at full capacity now. Boone says Saudis have no available capacity left to bring on-line. Doesn't mean crude can't trade lower but if demand stays at current levels the price will continue to rise.