In the Middle East, the Saudis and some others were skeptical of United States computer models predicting serious supply problems. After all, they were the same kinds of models that had wrongly predicted demand growth in 1997. So Richardson brought Hakes along to share data showing that inventories were skimpier than thought. The Saudis argued that demand for oil traditionally drops in the United States in the spring, and the market should self-correct. Hakes responded that demand for crude oil doesn't slump, only the demand for refined products.
Refiners are busy gobbling up oil to make gasoline for summer driving.
Eventually, Hakes says, the Saudis saw his position. He adds that he finds America's position amusing. Only a year ago, independent United States oil-production companies alleged that Saudi Arabia and other foreign producers were dumping cheap oil. That's what wonderful America is all about. Iran, meanwhile, was opposed to an increase in OPEC production.