

How OPEC Weaponized the Price of Oil Against U.S. Drillers - 001sky
http://www.bloomberg.com/news/2015-01-09/why-opec-is-talking-oil-down-not-up-after-48-selloff.html

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brownbat
"Weaponized" is a bit loaded.

It's simple game theory.

Cartel members cheat, and those outside the cartel are increasing production.
Saudi Arabia would love to constrict total global production, but it can't, it
can only shift production to others. It doesn't make any sense to try holding
a price high unilaterally in a competitive marketplace.

People keep looking at the effects (Russia hurting, USA shale producers
hurting) and trying to make those into causes. The explanation is simpler and
far less interesting. High production and low production both suck for the
Saudis, but high production currently sucks slightly less.

Prince Alwaleed bin Talal:
[http://www.usatoday.com/story/money/columnist/bartiromo/2015...](http://www.usatoday.com/story/money/columnist/bartiromo/2015/01/11/bartiromo-
saudi-prince-alwaleed-oil-100-barrel/21484911/)

(I know, I know, it's USA Today. It's a shockingly good interview somehow.)

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byoung2
Won't US companies simply continue drilling and frakking once prices rebound?

