Saudi Arabia’s Fake Surrender: Why The Oil Price War Is Still On
by Kurt Cobb via OilPrice.com,
ZeroHedge.com
Oct 11, 2016
What do you do when everyone is bugging you to do something, but you don’t want to do it? The simple answer is that you make it look like you are doing something in order to get others off your back.
It is not always easy to tell what people’s intentions are. But we can look at what they have done in the past. The main thing that the Kingdom of Saudi Arabia has done over the past year, in response to pressure from other OPEC members, is talk about steps it would take to raise oil prices. But in the end the kingdom doesn’t actually do them, or it does things which have no practical significance. (Saudi Arabia, the world’s largest exporter, is the OPEC member with the greatest flexibility in its production. Any OPEC production cut without Saudi leadership would lack credibility.)
We should keep all this in mind when evaluating the latest reports that OPEC has agreed to cuts. Bloomberg tells us right up front that OPEC has merely agreed to the “outline of a deal” that will be taken up at its November meeting.
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