The time may come when the nation-states of the Middle East will spend to pay for military forces large enough to defend them and their oil fields. But, in the meantime they would rather use their money to buy American banks and semiconductor companies. The US Defence Department keep their borders secure.
To keep the money flowing to fill the accounts of their sovereign investment funds, the Middle East members of OPEC still appear to want to keep the price of oil high. The oil minister of Saudi Arabia says that he expects oil demand will go up as the end of the year approaches. Minister Ali al-Naimi told Reuters "That is what it normally does, every winter the fourth quarter is always higher than the third quarter." It does happen when it gets cold.
But, as to supply, the signal from Riyadh is that things are fine. Speaking of current oil stocks, the Saudi minister said "I think they are in a very comfortable range."
In other words, oil may be down over the last week or so, but it is not going to continue that way.
Douglas A. McIntyre
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