The last global recession the world had was in 2001. Nymex crude oil prices, which had gone above $35 a barrel in September and October 2000, fell briefly below $20 a barrel in late 2001 before recovering in April 2002 to above $26 a barrel.

The oil price required for a marginal cost player to return its cost of capital is $65-75 per barrel.

Economic necessity is often cited as important in the price level. The lowest breakeven oil price that would bring the 2008- 2009 budget into balance in Saudi Arabia is $30 per barrel. The level in the UAE is $40 and in Qatar it is $55. The average breakeven for GCC is $50 per barrel.

We've discussed this many times in the past [Jan 21: A Tour Through the Middle East] and as I wrote in January While we wring our collective hands about how the infrastructure companies are going to lose all their business as crude drops from $100 to $75, and projects will be cancelled due to their rich customers actually giving a rat's behind if crude is $100 or $75 let's take a look at reality. I noticed a story in the NY Times this weekend on Saudi Arabia - so I'd like to overlay that with just a snapshot of what is going on in some of the other countries in this part of the world - the Kuwaits, the Oman's, the Abu Dhabi's, the Qatar's.... ... because perhaps I think most of us still are very inward looking as Americans and do not realize ...

Sometimes your worst fears come back to bite you in the rear. Case in point: In the New York Times, on October 14, 2001 the managing director of an oil consulting firm warned: "If Bin Laden takes over and becomes king of Saudi Arabia, he'd turn off the tap ... he wants oil to be $144 a barrel." At the time, oil traded at $23, and $144 a barrel seemed downright impossible. Well, terror mastermind Osama Bin Laden, safe in his undisclosed rat hole, must be grinning like a Cheshire cat, because last week oil soared past $144 a barrel. Indeed, if Bin Laden's aim was to hurt the U.S. through higher oil prices, he's probably thinking "Mission Accomplished." Soaring oil prices are fueling inflation and sowing the seeds of recession at the same time....

By Jason Simpkins Associate Editor Merrill Lynch & Co. Inc. (MER) has raised its annual infrastructure-spending estimate for emerging markets by 80%, as developing countries try to keep pace with fast-growing economies and large cash reserves, BusinessWeek reported. Investment in infrastructure, which the firm sees as the long-term solution to inflation, will rise from $1.25 trillion to $2.25 trillion annually over the next three years. And China, the Middle East, and Russia will account for 70% of infrastructure spending. The report from Merrill Lynch pointed out that Xstrata PLC (OTC: XSRAY) recently predicted emerging markets would spend $22 trillion on infrastructure in the next 10 years. “That estimate is among the highest we’ve seen,” the report noted, “with an implied run rate of $6.6 trillion over the next three years.” Estimated Infrastructure Spending For the Next Three Year...

By Jennifer Yousfi Managing Editor UBS AG (UBS) yesterday (Tuesday), announced it had obtained a license to operate in Saudi Arabia, joining a growing number of financial firms looking to recoup some of the over $400 billion in global write-downs to date by tapping into the oil-fueled wealth creation occurring in the Middle East. ”With over 40 years’ experience in the region our decision to set up operations in the Kingdom of Saudi Arabia is further evidence of UBS’ long-term commitment to the Middle East and marks yet another important milestone for the firm in this very exciting and significant market,” Chairman and Chief Executive John Fraser said in a company statement announcing the planned expansion. UBS expects to have wealth management, asset management, and investment banking services up and running in Saudi Arabia before year-end, a company representative told ...

I’ve been pounding the table about an energy crisis for quite some time. As a loyal reader of my Money and Markets column, you might think I’ve been proven right by gasoline soaring over $4 a gallon in 32 states and oil hitting new record highs.

But most of what I’ve been talking about is simply the long-term supply/demand squeeze that will transform our oil-addicted civilization in the future.

It appears, however, that the future is happening now. My fundamental and technical indicators are ALL sounding alarm bells.

Today, I’m going to give you an uncensored, no-holds-barred look at the consequences of the energy crisis. First, let’s talk about why Peak Oil poses such an extreme economic …

Just a few days ago, OPEC President Chakib Khelil told a French television station the awful truth that U.S. consumers don't want to hear. "I foresee prices probably between $150 and $170 this summer," Khelil said. At the same time, Libya announced it may cut production because the market is "oversupplied." Oil Minister Shokri Ghanem said: "We don't see any need for more oil. There is plenty of oil in the market." Libya pumps about 1.71 million barrels per day (bpd) of oil, out of total OPEC output of 32.12 million bpd. That means Libya could easily take away the 300,000 barrels in new production that the Saudis promised just a week ago. The Libyans, along with the rest of OPEC, want prices where they are now ... or higher. Why? Because they want ...

I hear that along with Peak Oil, the world is now hitting Peak Fertilizer. Well, there's enough BS being spread about the oil crisis that it could solve our fertilizer problem in a jiffy. Much of it is — no surprise — coming from Washington. Another load of bull is coming from our so-called "friends" in the Middle East. Even corporate America, where you might expect common sense to hold some sway, is busy shoveling misinformation. As a result, many investors are left neck-deep, choking, and grasping for a lifeline. The good news is that I do have solutions for you. More on that in a little bit. First, I want to start with some Peak Oil truths, half-truths, outright lies, and the dire consequences that are coming due if we don't get on ...

By Jason Simpkins Associate Editor The price of oil edged up again yesterday (Tuesday), before settling at $137 a barrel flat, as concerns about short-term supplies continues to overwhelm Saudi Arabia’s recent pledge to boost production. With Saudi Arabia offering some, albeit limited, cooperation, Congress has turned its ire on speculators and investment banks. First, demand from China and India was to blame for soaring oil prices. Then the weak dollar, the member nations of OPEC, Big Oil, and now investment banks take their turn in the rotation as politicians scramble to find a suitable scapegoat in an election year. Story continues below… Sign up right now, and we’ll send you an important new report for free: “The Three Best Investments in Asia.” ...

by James Hamilton The recently announced Saudi oil production increases are more modest than had been suggested in some of the earlier rumors. The Oil Drum ([1],[2]) is your source for the meaning of the latest announcements.