A visit to Dharan, Saudi Arabia, by a reporter from The New York Times yields some interesting color and an exotic dateline, but story Tuesday doesn’t shed much light on what’s motivating the world’s largest oil producer and exporter.

The story attempts to unwrap the enigma in the sand, but falls far short for one crucial reason: It doesn’t address the Saudi view of appropriate oil prices.

Saudi Arabia’s thinking has evolved over the years since it was ‘’swing producer'’ more than 20 years ago. Back then, it would single-handedly take on the burden of cutting back output deeply to try to artifically support prices. Trouble was, their OPEC brethren - and major non-OPEC players - were boosting output and raking in more revenue at the expense of the Saudis. Since then, even if it’s just a cosmetic move, the Saudis have insisted that all of OPEC (and at times some non-OPEC fellow travelers) cut output when prices are under severe pressure.

What’s crucial about the recent market situation is that the Saudis have noticed that steadily rising oil prices over the past few years haven’t hurt the world economy or significantly lessened oil demand. And the world’s biggest oil producer and consumer, the U.S., hasn’t pressured the Saudis to see it any differently.

What the Saudis see as the appropriate price for oil - and how low prices would go before they would cut output is the crucial question for the global economy. Some hints may be forthcoming at the Dec. 12 OPEC meeting in Kuwait, but don’t hold your breath. Oil Minister Ali Naimi likely will resist talking about appropriate prices while the market is strong heading into winter.

Naimi recently declared the market situation as ‘’beautiful,'’ applying the one true rule of OPEC. Whenever a minister comments on the status quo - the status quo immediately changes in reaction to the comments. In this case, Naimi’s apparent content was a reason to push prices up by $2-$3 a barrel.

With little incremental output capacity coming on line for the next couple of years, oil prices are likely to be underpinned around current high levels. But the Saudis seem fine with that. Much will depend on how much the Saudis and the rest of OPEC trim output when demand hits seasonal ebbs. The Saudis, ensconced as price-takers, rather than price-makers, in recent years are likely to take a cautious approach, allowing stocks to build modestly, while avoiding a price collapse.
At times, the Saudis and their secretive ways seem to be their own worst enemy from a political perspective. And the kingdom’s refusal so far to clarify their market aims only adds fuel to the fire of the vocal minority of analysts who claim Saudi output is nearing its peak.

Saudi output restraint and capacity investment restraint in recent years has been based solely on political decisions - not the conditions of oil reservoirs. And so far, the world economy has proved them right.