In Dramatic Escalation, Saudi Arabia Effectively Declares Oil Price War
On Friday, OPEC+ effectively died after a standoff between the Saudis and the Russians over a proposed massive production cut aimed at stabilizing oil prices ended in acrimony.
In the simplest possible terms, the meeting in Vienna was a bust. Putin looks bent on letting prices fall further in order to cripple US shale, even if that means jeopardizing his clout in the Mideast. "The Kremlin has decided to sacrifice OPEC+ to stop US shale producers and punish the US for messing with Nord Stream 2"
Wow. Saudis going toe to toe with the Ruskies. Should be fun to watch. For anyone invested in Texas fracking….lookout below. Hope they have good hedges. Might get $2/gal gas in CA again!
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This is again a master stroke from Putin which nobody was really predicting. Russia has been preparing for financial problems for years, so presently they are in a very strong financial situation while America and its energy industry is in a very dangerous position. So Putin strikes right at the time when it suits him to push the american oil industry out of business. In addition the world needs low oil prices to save the world economy. So short term pain for Russia to get long term gain. The same applies for the Saudi who are forced to join in to Putin’s way of playing his cards. Great brinkmanship!! Sorry, I work in the oil business, so tricky business…..
You might well be right but there is the related question of whether Putin would be happy to see Trump lose the election, which is presumably a touch more likely if your industry is in freefall.
Saudi Arabia is at war with Putin, but also, US frackers. The Saudis are seeking to destroy the US fracking industry. This has major implications for the USA – US Dollar slammed, US GDP slammed, sub-prime bonds slammed, oil price slammed, cats and dogs living together and general mass hysteria in the oil industry. All this happening against a backdrop of the global economy grinding to a halt.
Next week is going to be very interesting.
US oil production is a strategic necessity. Tarrifs on oil would be an ESG win and an economic support for fragile industry. Bet I’m not the first to think this
The global deflationary impulse is getting stronger by the day. Hold on to your seats, It’s going to be a bumpy ride.
USA is close to self sufficient for oil. Don’t need imports hardly. Oil company CEOs are calling White House for oil tariffs.
Saudis, those 9/11 guys, will want to negotiate. Fortunately we we have a stabile genius negotiator. Just ask a soybean farmer.
Twill be interesting.
As of now (13.11, central european time), israel market is down -4.5%, saudi market down -8.x%, Aramco down -8.x%. Monday is gonna be a really fascinating day. It seems an age ago (or a far galaxy away, for yankees) when market where at their 12years ATH, and volatilty was dead. It was 18 days ago.
We live in interesting times, indeed.
Has there ever been a positive reaction by the market when trump provides an initial evocation of tariffs on a market segment? If so what where the primary circumstances.
Has anyone done the math for the ratio between Each dollar in the rise of oil price from value at Stimulus Two : Each dollar removed per family of the typical 1200 or 2400 check?
Thanks again.