President Bush arrived in Riyadh, Saudi Arabia for a visit with King Abdullah to officially commemorate 75 years of relations with the Saudi kingdom founded in 1932. Bush hoped to push this purported ally and ’swing producer’ to increase production to impact on oil prices. The Saudis had previously increased production by less than 300,000 barrells per day to balance off possible loss of supplies. The oil analysts have all indicated that Saudi Arabia needs to pump another roughly 1.5 million barrels per day to reach a total of 9.5 million to “have an impact”.

Bush brought ‘a gift’ a deal to transfer ‘peaceful nuclear’ energy technology to the Saudis. All this does is increase the risk of proliferation and possible development of nuclear weapons in the Middle East. Meanwhile, last week the Congress adopted a resolution to deny sales of ‘high tech’ JDAM weapons to the Saudis.

Fred Leder, a friend and former energy industry executive had this to say about the reality of the Saudi ’swing producer’ role in the world oil markets:

Perhaps the reality was that if the US didn’t offer the Saudis a nuclear power deal , then perhaps the French would, as they have done for other Middle Eastern countries like the UAE.

But, ask yourself what is behind the spike in oil and gas prices these days?

The answer came today from a luncheon speaker, Walker Todd of Chagrin Falls, Ohio, here on Florida’s North West Panhandle. His topic was : “Oil , Gold, Commodities and the Dollar”. Todd has worked with the American Institute for Economic Research in Massachusetts. He has been a consultant to the New York and Cleveland Federal Reserve Banks. He has also done consulting work for the World Bank.

He talked about ethanol and the ridiculous Sugar tariffs and subsidies, as well as, the over the top Farm Bill that the House passed yesterday and may be ‘veto proof’.

Let me deal with one point of his discussion - pricing of oil.