http://www.usatoday.com/story/money/columnist/2015/04/05/loveless-energy-saudi-oil-policy/25288405/
The article details Saudi's determination to maintain production levels and market share. Even hints that OPEC is finished with acting to moderate prices. From their point of view US shale investment needs to be curtailed for prices to recover. They are not interested in cutting production while the US, Russia, Iraq and Iran all continue to maintain or increase market share. They may be willing to limit production if the other big producers cut back. Just my opinion, but there is near zero chance to get production cuts out of Russia or the US (and very little chance that Iraq or Iran cuts.)
The results will likely be much larger swings in oil prices going forward.
If sanctions against Iran are lifted, they should be able to increase production by some time next year. Iraq could also be putting more oil on the market if their offensive against ISIS continues to move forward. Given this and the resiliency in US production the downturn in oil prices could extend into 2017 or even 2018. Seems like the global economy and thus demand will have to pick up before we see substantial increase in price.
The article details Saudi's determination to maintain production levels and market share. Even hints that OPEC is finished with acting to moderate prices. From their point of view US shale investment needs to be curtailed for prices to recover. They are not interested in cutting production while the US, Russia, Iraq and Iran all continue to maintain or increase market share. They may be willing to limit production if the other big producers cut back. Just my opinion, but there is near zero chance to get production cuts out of Russia or the US (and very little chance that Iraq or Iran cuts.)
The results will likely be much larger swings in oil prices going forward.
If sanctions against Iran are lifted, they should be able to increase production by some time next year. Iraq could also be putting more oil on the market if their offensive against ISIS continues to move forward. Given this and the resiliency in US production the downturn in oil prices could extend into 2017 or even 2018. Seems like the global economy and thus demand will have to pick up before we see substantial increase in price.
