financialsense.com / KURT KALLAUS / 03/03/2017
The House of Saud was successful last November in its year-long quest to raise world Oil prices. After a few failed attempts to form a coalition of the willing, Saudi Arabia spent 6 months increasing output to unsustainable levels as part of a grand illusion. With the help of close allies, they pretended to cut output by 1.2 Million barrels per day (bpd) without any real reduction. Essentially Saudi Arabia, Russia, and the UAE can now produce more than they did prior to the 2014 Oil price collapse, but at prices that are more than double the 2016 crash lows. This is similar to a store doubling prices and then having a special 50% off sale to create the illusion of value. A nice trick, but they will lose in the long run as their market share will continue to erode. Yankee ingenuity should keep new US shale oil costs well under $40 in 2017, especially in the Permian Basin, ensuring a further production rebound.
An OPEC source told Reuters this week that “$60 will not encourage a big increase in (US) shale”. Yet, energy traders claim Saudi Arabia is offering discounts to all Oil
Read more ... source: The Bitcoin Channel
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