The Saudi’s are clinging to the past.
The days of them being the variable producer are coming to a close. They see that clearly and are completely freaked out by it. This is a desperate guy move.
The thing about desperate guy moves is…they’re desperate. Saudi Arabia is not putting this genie back in the bottle. American oil production is here to stay. Right now there’s a cost average race to the bottom going on, and a big game of chicken being played with cash reserves.
But US production isn’t going to just roll over and die. These people are fighting for their lives and have been largely successful about it.
I am absolutely positive that we will see some domestic US producers collapse. It would be silly to suggest otherwise. But what comes out the other side is a leaner, slimmer, more efficient US oil operation.
OPEC is dead, folks. The US endeavored to put a stake through the heart of that malediction for 40 years. In the last 5, we pulled it off. They are coming apart at the seams and the Saudi’s, as the ring leader for that little circus, are trying to hold it all together.
They’re not going to succeed.If you enjoy the content at iBankCoin, please follow us on Twitter