RPT-COLUMN-Saudi Arabia resumes familiar role as swing producer: Kemp | Reuters:
Saudi Arabia has resumed its traditional role as the swing producer, sharply reducing its own output to tighten the oil market and push prices higher.
The de facto OPEC leader has demonstrated, once again, that it can always tighten the physical market, boost prices and push the calendar spread into backwardation - if it is prepared to cut its own production enough.
The familiar problem is that protecting prices comes at the expense of market share: the more the kingdom cuts its own production and tightens the market, the more it encourages increased output from other sources.
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