After a week of discussions between the insane people who manage OPEC, one non-gulf state OPEC official blurted out ‘OPEC is dead’, just before stuffing his fat face with a falafel.
The Saudi position is clear. They will no longer target price action, since the dynamics of their monopoly has changed. Obviously, this is a shot across the American oil barrel bow. Instead, the House of Saud will focus on production levels and recapturing share, in order to bankrupt their enemies. Us.
“OPEC should recognize the fact that the market has gone through a structural change, as is evident by the market becoming more competitive rather than monopolistic,” al-Madi told his counterparts inside the meeting, according to sources familiar with the discussions.
“The market has evolved since the 2010-2014 period of high prices and the challenge for OPEC now, as well as for non-OPEC (producers), is to come to grips with recent market developments,” al-Madi said, according to the sources.
The House of Saud is becoming increasingly belligerent with its peer members of OPEC. They’re talking all sorts of nonsense in order to justify their walk down in the price of crude.
“The oil industry is, relatively speaking, not a growth industry any more,” said one of the sources familiar with the Saudi views inside the OPEC governors’ meeting.
In the past, low oil prices used to push global demand much higher but today’s rising efficiency of motor vehicles, new technology and environmental policies have put a lid on growth.
Despite record low prices in the past year, demand is not expected to grow by more than 1 million barrels per day in 2016, just one percent of global demand.
One thing is guaranteed: the kingdom will not go back to the old pattern of cutting output any time soon to support prices for the benefit of all producers, Saudi sources say.
“The bottom line is that there will be no free riders any more,” al-Madi said at Monday’s meeting. “Some OPEC members should ‘walk the talk’ first,” he told his colleagues.
Buyers of crude oil stocks beware. The House of Saud want to bankrupt you.
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The US was going to peak oil before Saudi. However, now that they (and everyone else) are pumping like mad at prices unprofitable for many US sources, we’ll still have our oil when prices spike (several years from now)