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Don't get pumped yet about Saudi oil boost

By Frank Pellegrini

(TIME.com) -- Hallelujah! Crude oil futures were sliding fast Wednesday in the wake of Saudi Arabia's near-unilateral promise to pump an extra 500,000 barrels a day into the world market. By midday Wednesday, the benchmark London Brent blend had dipped below $30 a barrel and seemed well on its way to the long-term $25 target that the Saudis say they're aiming for -- a price that could shave 20 cents a gallon off nationwide prices at U.S. pumps.

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But there's a reason they call them futures.

A spike in production takes about six months to work its way though the pipeline from the derrick to your Dodge Caravan, making stops at refineries, distribution networks and retailers before winding up in the gas tank. By then, U.S. consumers could be facing a new energy crisis -- how to keep warm this winter with heating oil and natural gas prices on the rise -- that will make this summer's vacation frustrations a distant memory.

But at least no one will be able to blame the Saudis, who had three reasons for stepping out of OPEC's shadow Monday. They're concerned about the Asian and Latin American economies -- too-pricey oil could choke off nascent recoveries and reduce demand down the road. They're mindful of that Gulf War IOU they still owe the U.S. for getting (and keeping) Saddam out of their backyard. And they're not anxious to become one of the Bush-Gore presidential campaign scapegoats. Gore has so far been content to bash Big Oil (the U.S. kind) and Bush the current administration's energy policy; now it's likely to stay that way, with the Saudis and Arab politics staying at a comfortable remove from the calculus.

Of course, none of this is doing OPEC unity any good. Of OPEC's 11 members, only the United Arab Emirates, Kuwait and Algeria seem ready to help the Saudis meet their half-a-billion boost -- and that's more long-term good news for the gas-guzzling U.S.

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