Damned either way….

Following Brown’s call for OPEC to come clean on reserves, James Howard comments:
http://www.powerswitch.org.uk/portal/index.php?option=content&task=view&id=422&Itemid=2

For OPEC to open its books would mean an end to all the speculation about OPEC’s oil reserves situation – especially Saudi Arabia. It seems that Mr Brown’s concerns are about how much oil is left because he thinks it is the speculation that is driving up oil prices.

But what happens if the speculation that the situation in Saudi Arabia is not as good as the Chancellor would like is true? Would the truth be more damaging than the unknown? There is no doubt that the spurious reserve increases of the mid-80s by OPEC members is at least one major reason to question the stated figures. The uncertainty over those numbers creates a grey area which is both advantageous but also damaging – speculation fuels the market, but certainty could make it worse.