Originally Posted by
nwaf16dude
OPEC meeting ended, lots of squabbling, but the bottom line is they couldn't come up with a consensus to restrict production, so oil is headed lower, as in off a cliff. Some in OPEC want the price to go low enough to make US shale oil uneconomical.
Makes sense. This has been going on since OPEC first came together. The Saudis have hundreds of years of "known oil reserves" in the ground and have always been much more conservative than many other OPEC members.
The Saudis know that sustained higher prices will accelerate research and development into oil substitutes, and with the largest know reserves, have the most to lose if viable oil substitutes should hit the market.
Ideally the Saudis would like to keep oil at a "sweet spot" that will continue to provide them with billions for years to come, but at the same time low enough to keep alternatives economically non-viable.
Scoop