{"id":3050,"date":"2014-12-15T15:49:43","date_gmt":"2014-12-15T20:49:43","guid":{"rendered":"http:\/\/olduvai.ca\/?p=3050"},"modified":"2014-12-15T15:49:43","modified_gmt":"2014-12-15T20:49:43","slug":"oil-the-battle-for-market-share-the-saudis-1985-playbook-zero-hedge","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=3050","title":{"rendered":"Oil: The Battle For Market Share & The Saudi’s 1985 Playbook | Zero Hedge"},"content":{"rendered":"

Oil: The Battle For Market Share & The Saudi’s 1985 Playbook | Zero Hedge<\/a>.<\/p>\n

Via BofAML’s Jake Greenberg,<\/em><\/p>\n

OIL: the battle for market share & the Saudi\u2019s 1985 playbook<\/strong><\/span><\/p>\n

Stay positioned for \u201ca good sweating\u201d = stay short the SXEP\u00a0<\/strong>(European Oil & Gas Stocks)<\/strong><\/span>\u00a0and sell rallies<\/strong><\/p>\n

In 1985, the Saudis chose volume over price to defend their market share against new production from the North Sea, as well as cheating\/discounting from other OPEC members in a period of weak demand.\u00a0 With Iraqi exports ramping up, in spite of the war with Iran, the Saudis went around the world signing netback deals, which incentivized refiners to buy\/produce as much product as possible…the market was oversupplied and the price of oil fell from $31.72\/bbl in November 1985 to $10.42\/bbl at the end of March 1986.\u00a0 A fall of 69% in four months!<\/em><\/span><\/p>\n

The Saudis had warned the world of their intentions<\/strong>, but many thought\u00a0\u201cit was merely an elaborate warning designed to scare other OPEC countries and restore discipline.\u201d\u00a0<\/em><\/p>\n

See the chart below<\/strong>\u00a0– the price remained volatile through 1986 and then saw a sustained recovery with the implementation of an OPEC quota system that members actually upheld until 1989.\u00a0 Interestingly, the agreement in 1986 also included cuts from non-OPEC members Mexico, Norway, and the Soviet Union.<\/p>\n

In 1985-86, the Saudis gave the market \u201ca good sweating\u201d…WTI fell more than 69% in four months!<\/strong><\/em><\/p>\n

<\/p>\n

<\/a>…click on the above link to read the rest of the article…<\/span><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil: The Battle For Market Share & The Saudi’s 1985 Playbook | Zero Hedge. Via BofAML’s Jake Greenberg, OIL: the battle for market share & the Saudi\u2019s 1985 playbook Stay positioned for \u201ca good sweating\u201d = stay short the SXEP\u00a0(European Oil & Gas Stocks)\u00a0and sell rallies In 1985, the Saudis chose volume over price to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[1775,596,600,701],"class_list":["post-3050","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-oil-price-collapse","tag-oil-supply","tag-opec","tag-saudi-arabia"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3050"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3050\/revisions"}],"predecessor-version":[{"id":3051,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3050\/revisions\/3051"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}