Saudi Arabia Is Taking a Harder Line on Oil Prices

[IsailedawayfromFR]

For decades, Saudi Arabia was the voice of moderation within OPEC, pushing back against the urging of members like Venezuela and Iran for higher oil prices. That role seems to be shifting.

Thanks to OPEC-led production cuts, crude prices are double their level two years ago and bloated oil stockpiles are almost back to normal. Yet Saudi Energy Minister Khalid Al-Falih wants to go further.

Producers should keep cutting for the whole year, even if it causes a small supply shortage, Al-Falih said. “If we have to overbalance the market a little bit, then so be it,” he told reporters in Riyadh last week.

When Success Isn't Enough
OPEC has almost cleared the oil glut, but Saudi Arabia wants to go further

takeaway at end:

Emboldened by the success of their strategy so far, the Saudis are now pursuing price levels that will ultimately lead to failure, said Eugen Weinberg, head of commodity market research at Commerzbank AG in Frankfurt.
Crude’s recovery is stimulating record shale-oil output from the U.S., which is on track to surpass both Saudi Arabia and Russia as the world’s biggest crude producer this year, according to forecasts from the Department of Energy. A new flood of supply could easily send prices lower again, according to Weinberg.

“The Saudis got overconfident,” Weinberg said. “Their goal has become higher prices, no matter the cost. But that won’t work in a market like this.”
http://www.bloomberg.com/news/articles/2018-02-19/once-opec-s-oil-price-dove-saudi-arabia-takes-a-harder-line?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo