The stories about the Saudi's preparing to drive down oil prices to increase market share to starting to float around more and more. I have my doubts about them. First the sources of the stories don't cite any real basis, just kind of rumor repeating. Second, it would be a compete reversal of Saudi policy for many years, which is to control production with OPEC. Third, it would severely hurt, and make enemies of many of it's neighbors, some of which are the same religion, and some of whom can get pretty nasty. Would Iran just sit back and let itself be driven into the ground? Fourth, it increases the risk of internal instability, aided by it's new enemies. I don't see why the Saudi's would take all the risks, plus severely hurt it's own economy in the interim, when just supporting prices offers immediate and longer range benefits. As Slider has pointed out, it's not the cost of getting the oil out of the ground that counts, it's the price oil has to be for the Saudi's to run their Government. I put the rumors into the same class as the stories we were hearing just 6 months ago about how the world is ready to run out of oil. When prices are up, the stories that get quoted are those that say it will go up forever, and when prices are down the stories are they will stay down forever.
Gotta be impressed by the strength of the OS when there is absolutely no short term positive news to create a pop. Has to be longer term institutional investors. Too broad, too much volume, and lack of some passing event to be the usual in and out crowd.
Mike from La. |
