The increase in Saudi Arabia’s oil production in response to a request by President Bush amounts to only a “token” rise in output, according to an oil expert quoted in Bloomberg.

“It’s just a token increase but it shows that the Saudis realize just how important it is for the president to not come back empty handed,” said Peter Beutel, president of Cameron Hanover Inc. in New Canaan, Connecticut. “This is about a lot more than oil, the special relationship between the countries is at stake.”

With oil prices pulling back this week, perhaps not unsurprisingly, from the psychological barrier of $125 a barrel, it’s a good time to take stock of where we are and where we’re going.

Mexico is the seventh-largest oil producer in the world. Petroleos Mexicanos, known as Pemex, is the country’s state-owned oil company.

Pemex pumps out more oil each year than Exxon Mobil. It pays for 40% of Mexico’s federal spending. And thanks to lack of investment, high taxes, corruption, anti-competition laws, Pemex is headed for collapse.

The bottom line, says Justice Litle in Taipan Daily, is that Mexico’s oil fields are running dry.

With oil prices nearing $120 a barrel following supply outages in Nigeria and the North Sea, one oil price prediction is looking scarily accurate.

In December, Money Morning Investment Director Keith Fitz-Gerald publicly forecast that oil prices will reach $187 a barrel within three years. In mid-March, he reiterated this projection.

“Being rich is bad,” declares Venezuela’s president. But someone’s forgotten to tell his people. Because this place isn’t some dour socialist paradise… you can see the money everywhere!

The recent discovery of two massive Brazilian oil fields may end the US’s reliance on Middle East crude.

According to Bloomberg:

Saudi Arabia’s influence as the biggest oil exporter would wane if the fields are as big as advertised, and China and India would become dominant buyers of Persian Gulf oil, said Peter Zeihan, vice president of analysis at Strategic Forecasting in Austin, Texas.

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The Kingdom of Saudi Arabia is the world’s leading petroleum exporter. Officially, it has reserves of about 260 billion barrels of crude oil – approximately 24% of the world’s total proven petroleum reserves.

A recent story in the Financial Times covered the possibility that Nigeria’s crude oil output could fall by a third in the next seven years. The problem is, Nigeria is one of the top five foreign oil suppliers to the U.S.

Despite the fact that the gold price has now slipped to around $924, gold miners still expect the gold price to rise further. Indeed, they’ve put their money where their mouth is.

China’s long-term prospects are so strong that even a civil war, an economic collapse or political assassinations would only temporarily delay its emergence as a worldwide economic powerhouse.