Now that Saudi Arabia has made its announcement and promised to increase production by 200,000 barrels, we enter a critical time. The increase does not make up for the losses being felt in Nigeria due to the violence there. The Saudis have had difficulty producing more than 9.5 million barrels per day for a few years. They keep bringing new projects on line, but those projects only seem to be able to make up for reduced outputs in fields that are in depletion. What they are offering now is too little, too late.
We could see a quick run-up past $140 towards $150 within the next two weeks. And we could see the first signs of shortages by the end of August.
It is encouraging to hear both presidential candidates talking about nuclear power. But we need to get moving.