RE:Saudi Arabia calls for emergency oil meetingWhy would Saudi Arabia and Russia do anything to rescue high cost producers that largely are swimming in debt? Why go through this pain only to snatch defeat from the jaws of victory? $30 will probably do the trick but why not kill off high cost producers more quickly with $20 when demand is incredibly low because of coronavirus.
One could argue that during this time of global quarantine/shutdown Saudi Arabia and Russia are showing restraint by not driving oil well into the teens. I think both will continue to dump enough oil to drive oil prices into the teens but start jawboning to keep it in the 20’s. Once the bankruptcies start to flow it will then drive it into the teens as a final death blow. Game over. Saudi Arabia and Russia win.
VET is incredibly vulnerable. JMHO. GLTA.
oilisswell wrote:
No surprise there. Of course Trump will take the credit. He stated this:
"Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!"
Now I am quite pleased to see the price of oil and O&G shares rise. However, I have to believe this is BS. Adfter all, that cut would represnet nearly 50% of their combined production.
Of course it is denied by Putin. However, Russian Energy Minister Alexander Novak told Reuters it had no plans to crank up its crude output. Duh! SInce we are awash with oil, and running out of places to store it, incresing production will not translate into increased sales, only less revenue from what is sold.
With shale oil companies starting to cry uncle (bankrupt), the US will invariably contribute to the reduced production!