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[PAGODA5]

The only issue here is they are playng a game they can't win.  The Saudis have social committments to their people that amount to a break even point for them, at around $75US per barrel.  They are just now trying to unwind the whole state subsidized lifestyle that the people their once enjoyed.  It is not going well.  For eaxample, they just ended their nationa wide gas subsidy.  More cuts are fothcoming.  Low cost producer, but also a very high spender.  As a monarch,Muslim based country, they have to be very careful of another Arab spring.   Further, they are considering selling a portion of their state owned, biggest oil company in the world, Aramco.  That is a company rich with national pride!  If things were so good in SA, why would they IPO into the crappiest of all oil markets?  Makes no sense to me.  

Now they have routed the market, they have to keep prices low perpetually.  If prices rise, it really does not take much for the high cost US shale producers and frackers to jump back online.  Heck, now you can go buy the rigs and drills so cheap, any Joe Schmo can get going with his own wildcat oil company!  I believe they have effectively splintered the market.  They blew up the big dogs but the dogs now had puppies.  You will see many more tiny, sleek, mobile oil players in the next few years and they are going to give the Saudis fits when they decide to cut back production and prices rise.  

This is high stakes poker and will see who folds first.