Ann: Cooper Basin Update, page-13

Excellent post hindmost although I feel I must make a few comments:

The countries affected the most by a lower crude oil price are as follows: Russia, Iran, Iraq, Libya, Venezuela, Cuba, and Saudi Arabia. Saudi Arabia, as the world's biggest oil producer, will be overcome with catastrophic debt and budget deficits, if they allow the price of oil to remain too low for too long.

It is a fact that OPEC did not drive down the price of crude in order to dismantle the American fracking industry and shale oil producers. The price of crude is being driven down by speculators on the commodities exchange, the same speculators who will drive it back up again. It's now history that OPEC did not cut the supply when they last met, and I agree that their likely motivation might have been to drive some of the North American shale producers out of business. But this is just speculation.

The point I am trying to make is, that shale oil production in the USA, as a percentage of GDP, is nowhere near that of Saudi Arabia. I would go so far to say, that Saudi Arabia's economy is almost totally reliant on oil production. As for the Saudis losing market share if they cut production, this is also pure speculation. They were already discounting a great proportion of their supply anyway and I venture to say-and here I am speculating-it wouldn't take them long to get it back.

I agree, the Saudis and OPEC would prefer the price of crude to go up of it's own accord, but should that scenario not eventuate, I am speculating they will step in and interfere in the market. Why would they devastate their own economy for the sake of bringing the North American shale industry to it's knees?