Saudi KING: Price of Oil Too High

Ever get the feeling you're being lied to?

"Experts" warn that the price of oil could spike over $100 a barrel if sanctions are imposed on Iran.

BUT...

In a rare interview to India’s NDTV news channel [today] King Abdullah . . . admitted that current oil prices were too high and thus hurting developing countries. He said Saudi Arabia had the ability to meet any requirement that India may have for its energy security.

“We want to strengthen the link between India and Saudi Arabia with regards to energy and the ability to provide energy to India over the long term. From our perspective I personally feel that the current price of oil is too high.

“The price is damaging to developing countries who subsequently have to suffer. The price needs to be at a more moderate level. With regards to the export of crude oil to India, we would like to provide India’s requirement of energy in the future,” he said.

You might argue that the $100 warning is only if sanctions are imposed. But, here we are on the eve of potential sanctions and the good King does not seem to be worried. And he's not alone...

"Oil shouldn't be trading above $65 a barrel," [said Michael Strauss, chief economist at Commonfund in Wilton, Connecticut]. "It constrains the whole market and only some energy utility shares benefit"

So, if they both think the price of oil's too high, and we know that supplies are ample and demand is moderate, then who's charging us a premium, and WHY?

[Lebow] added that the market is "completely decoupled" from the fundamentals of supply and demand.

So, maybe my theories are not so far off, after all.

Read more on the increasing number of reciprocal oil agreements between Saudi Arabia and both India and China. Looks like the world will get along just fine without us.

One more thing. Remember how traders initially bid up the price of oil based on rumors that Iran was shifting its reserve assets? Well...

For the second time in two days, Iran on Sunday denied that it was withdrawing foreign currency reserves from European banks.

"Iran's foreign currency reserves will be kept in all banks we trust in the world, including European and non-European banks," the Central Bank said.

Someone's been telling some TALL tales.