Saudi Arabia to Invest $90 Billion

Wondering where all the oil we need will come from? Saudi Arabia reckons it knows.

Al-Falih said Saudi Arabia is committed to maintaining 1.5 milion barrels of oil a day of spare production capacity. The kingdom, which recently underwent a big expansion of its oil output, currently has a spare capacity of 4 million barrels a day.

They plan to spend $90 billion over the next five years to maintain that position.

As recently as 2009, they brought a new mega oil field into production.

As always there is uncertainty over what Saudi Arabia says about its reserves and production, but if they really have 4 million barrels of excess capacity, then the fundamentals would suggest no real oil price rises over the next couple of years.