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There's a lot of speculation on OPEC's motives and power. They could be trying to shut down exploration in the US. The Saudis could be doing the US a favour by
by matt4077 12y ago
There's a lot of speculation on OPEC's motives and power. They could be trying to shut down exploration in the US. The Saudis could be doing the US a favour by trying to destabilise russia. They could be trying to sabotage green energy for a while. Their coalition might just be powerless because everyone needs to pump out as much oil as possible, especially at these price levels.
Regarding future price levels the efficient market hypothesis probably holds: nobody without inside information knows which way the oil price is going.
- WallWextra 12y agoThe reasons I've heard were to kill US oil exploration, and also to teach the high-cost producers (Venezuela, etc) in OPEC a lesson. It's common for these countries to "accidentally" pump over quota to make some extra cash. So Saudi just refused to cut the quota this time around. The Saudis could also be interested in messing with Iran, which has much higher production costs.
- aikah 12y agoI read a lot about the subject and couldn't come up with a satisfying answer as to why the Saudis are doing that. All I know is they are playing a very dangerous game and Washington is letting them do it. People say,there will be no consequences for USA,but oil prices will go up again sooner or later. What then ? I don't believe shale oil is an explanation.
- tptacek 12y agoYou don't believe shale oil is an explanation... why? Have you looked at the barrels/day production figures for shale oil? They are gargantuan.