Saudi Arabia Refuses To Cut Oil Output Even If Non-OPEC Members Do | Zero Hedge.
As even Reuters observes this morning when discussing the ongoing crude rout, “the market slide has triggered conspiracy theories, ranging from the Saudis seeking to curb the U.S. oil boom, to Riyadh looking to undermine Iran and Russia for their support of Syria.” It appears said theories will continue raging for a long time, because as Saudi Arabia’s oil minister who has been extensively in the news in the past couple (that means “two” as per Janet Yellen) of month explained, the biggest OPEC oil producer said on Sunday it would not cut output to prop up oil markets even if non-OPEC nations did so, in one of the toughest signals yet that the world’s top petroleum exporter plans to ride out the market’s biggest slump in years, and that the price of crude is not going up any time soon.
Which goes back to what we said on Friday, namely that in a paradoxical response, with crude prices crashing, the US is set to produce even more oil, not less, and the output in 2015 will hit a 42-year (if not record) high as all the marginal producers scramble to outlive their closest competitors and obtain as much precious cash for their product as they possibly can.
And it’s not just the US, but the entire oil-exporting world that will have no choice but to proceed with the only known strategy when the price equilibrium experiences a sudden and dramatic collapse, making a mockery of everyone’s budget: dumping.
