Monday, December 22, 2014

What Is Saudi Up To? -- Rigzone -- December 22, 2014; It's All About Market Share

Link here. A John Kemp, Reuters, essay over at Rigzone.
Conspiracy theories are neither necessary nor helpful in trying to understand recent events in the oil market. Not necessary, because they add nothing to explanations for why prices have fallen. And not helpful, because they imply Saudi Arabia could rationally have pursued a different policy.
There are times when history is made through secret backroom deals among the great and powerful. But most of the time it unfolds on its own as a result of mistakes, miscalculations, accidents and unforeseen events which catch senior policymakers as much by surprise as the rest of us.
From an earlier post:
"If my calculations are correct, this (Saudi's inaction) will go down as one of the worst commodity trading decisions ever," Wilbur Ross, billionaire investor and chairman of WL Ross. [Elsewhere: $138 million/day; previously posted.]
Again, Rigzone essays will likely be archived and accessible by subscription only; a word to the wise. 

... and the answer is: Market Share

Saudi continues to stand by its story -- it's all about market share ... even if oil falls to $20. -- Financial Times.


  1. Ron at PeakOilBarrel has a history of trumpeting weak claims for peaking. In the most recent case, someone did a careful analysis and showed no significant trend on Bakken wells getting worse:

    Here is a previous screwup by Ron (he didn't understand how Texas reports boost amounts for several months by corrections).

    1. Thank you. Very much appreciated. So this can be googled, I re-posted your comment here: