Saudi Arabia plays a complicated game with oil prices | The National

Saudi Arabia plays a complicated game with oil prices | The National:



"The recent sharp fall in oil prices shows a game within a game. Brent crude has lost nearly US$20 since June to fall below $100 a barrel, its lowest level for two years, even as Saudi Arabia cut 400,000 barrels per day from its production. The Saudis compete against non-Opec producers, while playing both with and against their Opec peers.



Saudi Arabia has a particularly complicated task at the moment. It firstly has to take the lead in deciding on a reasonable overall Opec production level. This never-ending question is one in which it is well versed in answering.



Economic weakness in China led a sharp slowdown in demand. US production was driven by shale to its highest level since 1986 this year, and is likely to beat its all-time high next year, with new deepwater production also on the way. The stronger dollar also puts pressure on the price."



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