Oil Prices Up, Saudi Arabia Will Never Cut Production

"I can't hear you over the 'cha-ching' noises"

Oil Prices Up, Stock Prices Up, Saudi Arabia Won't Cut Oil Production

Happiness for the elite of Saudi Arabia isn't all about suppressing their urges and torturing women, it has a lot to do with making money -- and lots of it. Oil prices have shot up to over $36 a barrel (at the time I'm typing this) and a major reason for that is the rumor that OPEC countries will cut production. Anybody who believes that lie is either kidding themselves or has a brain the size of a sucked-on jelly bean. Saudi Arabia is too greedy and will never cut their production of oil.

Even if some (or all) of the members of OPEC say that they will cut production, it's simply not going to happen. The main reason for that is greed, and the other reason is they fear that other OPEC countries won't live up to the promises of cutting back production.

Iran is a member of OPEC and is their third largest oil producer. They are currently trying to make up for lost time (i.e., money) after having nearly all the sanctions against them lifted in January. Iran has been truthful by telling the world that they won't be cutting back on production until after Hell freezes over in the month of August. As a matter of fact, they claim that they are going to increase their production from 1.5 million barrels per day to 1.65 million. "In your face, everybody," said Iran.

They have customers from Europe and Asia lined up around the block and ready to do business with them. The oil prices Iran has set are lower than their competitors, and when oil is priced to move, it's going to fly off the proverbial shelves.

So, there's no way that Saudi Arabia is going to cut production due to that fact alone. 

Foolish stock traders have panicked for the past month and a half... big time; and it's all because of the price of oil. But, they didn't have to and shouldn't have. The price of oil doesn't have to be directly related to the price of stocks, but for some reason, it has always been that way. The stock market is mostly about sentiment, panic, and greed. The only reason that stocks change when a company isn't doing so well is because of "the game" and sportsmanship.