Wednesday, April 22, 2015

Saudi Arabia, besieged on all sides, gambling with last of its cheap oil

oilprice.com: "Saudi Arabia is not trying to crush U.S. shale plays. Its oil-price war is with the investment banks and the stupid money they directed to fund the plays. It is also with the zero-interest rate economic conditions that made this possible."
Saudi Arabia, forced into a gamble, precipitated the fall of expensive oil. Why? Demand in the west was falling and China teetering on edge of recession, while Russia and Iran taking market share. The US was propping up production way too long on printed money. It was time to take action to preserve market share. Saudi Arabia is gambling it's last cheap reserves to hold on to power -- as the three pillars are wobbling and the Islamic State will take it over in a sweep like the fall of Mosul.

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