Getting Paid

Saudi Arabia has a plan to boost their oil production in the near future. According to the NYT's Jad Mouawad that "was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effect of high oil prices." But couldn't we just see it as a sign that you can make more money than ever selling oil these days so it became worth the Saudis' while to find ways to boost production? That's the market in action. The days of OPEC seriously enforcing production quotas on its members seem to be long gone in these days of rising prices and still steady demand.

Note, however, that though this kind of measure may well bring the price of oil down, it seems to cut against the notion that there's a speculative bubble in oil prices. The Saudis wouldn't be doing this if they thought an oil price crash was in the works.