Reader Sends Link Regarding Crude Oil's Recent Sawtooth Price Pattern -- April 30, 2015
A reader
over at the Discussion Group sent
this link; nice article. An excerpt:
On a go forward basis, the reason for price excursions will be real
changes in shale oil production together with speculative beliefs in
this regard. I have asserted in previous posts that the US has
unwittingly become the swing producer, meaning when it sneezes world oil
catches a cold. The Saudis used to have this status together with OPEC
determinism of oil supply.
Recently Boone Pickens shared a stage with
former EPA head Carol Browner and ex-secretary of energy, Steve Chu,
discussing the environmental safety of shale oil and gas production; no
doubt the debate was entertaining. Associated with this occasion Pickens
stated to the press that the US was responsible for the oil price
crash, not the Saudis. While this is not exactly news to at least
readers of my posts, I cannot recollect a causal link being suggested by
any person vested with expertise.
Most of the press has been on why the
Saudis did it, rather than whether they did it. Damaging US shale oil
production and hurting the economy of Iran and weakening Syria’s Assad
(the latter through impoverishing financier Russia) were the principal
theories advanced. Assuming the validity of Pickens’ assertion, one can
conclude that if US production brought the price of oil down, then
reduction in the same would send it back up. One theory of Saudi
motivation would be supported.
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