Interesting articles & perspectives – looks like Venezuela & Iran finally shot themselves in the foot big time with Saudi’s! The Saudi’s are only ones Have kept quota’s by making adjustments to their production for all other members “Cheating” on agreed target volumes. <Past decades situation like this – when target volumes were set to keep price below $25/Bbl to prevent 2nd Recovery options & new drilling from happening – Saudi’s took price way down to send revenue loss message to other members…..perhaps this is refresher course>
The Saudi’s not cutting production, the addition of large new Brazil crude fields mentioned, PLUS the newly passed US bill to allow offshore drilling (+100 miles) are going to put some strong additional downward pressure on-top of those already in play.
The bankruptcy of several speculators on commodities/crude and financial crisis canceling lot rest has already unwound over $47/Bbl of unsupported Crude price value over fundamentals and the lower damage levels from twin Hurricanes Gustav & Ike is already unwinding some short term builds as well. This may well shift earnings out of upstream & back into downstream and little relief for the Independent Oil Co.’s