Have the Saudis Lost All Credibility?

This morning, on CNBC, we heard that the Saudis are strongly suggesting they are about to start pumping more oil. What's more, we learned that Saudi Arabia, which is OPEC's largest producer and the world's top oil exporter, pumped an average 8.75 million barrels a day in October, the highest since November 2006. Right now, according to CNBC, Saudi Arabia is producing more than 9 million barrels a day.

You'll remember that OPEC agreed in September to raise production targets for the 10 members with quotas by 1.9% starting Nov. 1. So that's increase on top of increase.

Oil prices tanked by over a dollar a share on the news. But right now, oil has recovered and is trading about flat.

Why is that? Maybe it's because of THIS.

OPEC oil exports fall 340,000 bpd in First Half of November

OPEC seaborne oil exports, excluding Angola, fell 340,000 barrels per day (bpd) in the first half of November versus the last two weeks of October, crude oil loading data released by Lloyd's Marine Intelligence Unit (LMIU) showed on Monday.

The London-based consultancy said oil shipments from 11 OPEC members, including Iraq, averaged 22.48 million bpd on a moving average basis to Nov. 11, down from 22.82 million bpd for 15-28 October loading.

So why is OPEC shipping less AFTER it says it raised production quotas? Part of it could be the outage of major oilfields in the United Arab Emirates. But that doesn't explain everything.

Maybe it's as simple as OPEC likes higher prices, so it's going to spread soothing words around while keeping a lid on production.

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