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Saudi prince wants lower oil price. I repeat – Saudi prince wants lower oil price.

By SYF77 on 15 Jun 2011

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There is no typo error in the title of this blog entry, in case you were wondering. In a recent interview with CNN’s “Fareed Zakaria GPS” on cnn.com, Saudi Prince, Al-Waleed bin Talal, mentioned that he wants the price of oil to decrease.

During the interview, Al-Waleed said the price of oil should be in the neighborhood of $70 to $80 a barrel. Today it’s trading around $102 a barrel. "We don't want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives," Al-Waleed said on the CNN program. Saudi Arabia is very concerned about the auto industry’s technology breakthroughs. In particular, the Herculean efforts by American and European auto industry to reduce gasoline consumption drastically. The hybrids, plug-in hybrids and electric vehicles are apparently causing sleepless nights for the royal family, and so is President Obama’s corporate average fuel economy and emissions proposal, which is aimed at boosting dramatically the fuel economy of future vehicles. The new federal fuel economy and emissions rules that took effect on 1 Jan require automakers to achieve a corporate average fuel economy of 35.5 mpg by the 2016 model year. This could go up to a range of 47 to 62 mpg by 2025 model year, as proposed by Obama.

All these could lower indicate lower petroleum consumption in the coming decades, hurting the GDP growth of the oil-rich country. However, Prince Talal should not be worried. With rising affluence, China has surged past the United States as the world’s largest car market. In addition to increasing car sales in China, the Chinese likes large sedans as evident in the introduction of extended models specifically built for the China market. With a greater mass to move, fuel consumption will suffer. Hence, Prince Talal can go ahead and eye for the latest Lamborghini Aventador or Ferrari FF.

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Written by SYF77
I have been a car fanatic since 1989, when my father was changing our family car then to a Toyota Corolla 1.6 GL fitted with a Twin Cam 16 valve engine that was carburetor-fed, a big deal back in those days. The automobile technology and industry fascinates me and I hope to broadcast these interesting developments to everyone out there through this blog.

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Macrosszero Jun 15 2011 03:27 PM
The prince is a smart man well schooled in balancing price against demand and supply. If oil skyrockets, the conditions are ripe for alternative fuels to take centre stage. This will bring more interest and funding into things such as hybrids and fuel cell vehicles, which once they take root in mainstream motoring, will have no turning back for "primitive" gasoline powered cars. The Saudis would then be sitting on a mountain of black oil that people don't really have a need for anymore.

Oil is like a drug, you need to keep the supply affordable to the addict, yet not so expensive that the addict decides to try out other substances as an alternative to getting his high.
Kilatz Jun 16 2011 05:13 PM
Even at $80 a barrel, I can bet my bottom dollar that petrol prices in Singapore will not go down to early 2002 levels. At most it will go down by ten to 15 cents. The oil companies here have tasted high income prices, its impossible for them to lower their profits... There will surely be many excuses to keep the prices up.
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