Saudi Arabia is planning to increase oil production next month by a half-million barrels a day. The increase could put the production levels at close to 10 million barrels per day.

So why when the Saudis are getting record-breaking pricing would they want to increase oil production?

The move is a clear sign the Saudis are getting a little nervous about the effect of high oil prices. Not that they don’t like the pricing, but they are becoming aware of how the increased pricing is effecting economic world-wide growth – thereby leading to less oil needed.

The Organization of Petroleum Exporting Countries (OPEC) on Friday cut its 2008 estimate of world oil demand. Citing slower economic growth and high oil costs – which leads to lower demand in major countries.

If you think about it, reliance is key. If they keep the overall oil pricing in an area where there is still growth (and the general consumer can afford it) then, due to general apathy, there will be no real focus on finding alternative fuel sources.

We have been here before with the same result. Will we learn from it this time? I doubt it, some things never seems to change…

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