Published in MarketWatch:
“The most noteworthy point is that the this plan confirms that Saudi Arabia is going to maintain its current policy in oil markets—defending market share and ignoring commercially unwise calls for an output cut,” said Omar Al-Ubaydli, a program director at the Bahrain Center for Strategic, International and Energy Studies.
“Any speculators who were hanging on to the hope that internal and external political pressure would lead the Saudis into a commercial error [output cut] should really consider moving on, and accept that the Saudis are not going to cut output for the benefit of other producers, and at a significant cost to themselves,” he said.
Published on MarketWatch:
“The primary motivation for Saudi Arabia and others to continue acting as if these meetings will have a tangible effect is that they are grandstanding for their constituents; they want to show them that they are trying, but that it is external forces that are preventing them from securing high oil prices,” said Omar Al-Ubaydli, a program director at the Bahrain Center for Strategic, International and Energy Studies.
He believes that the recent rise in oil prices is “far more reflective of fundamentals,” which include decreased oil investment and pressure on U.S. production, rather than any “supposed coordination among oil producers.”
If prices jump after the meeting, “it will be mostly reflective of short-term speculation, and will peter back down to what market fundamentals would predict shortly thereafter,” said Al-Ubaydli.
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