#Saudi 'Whatever It Takes' Pledge Won't Move Oil Prices - Bloomberg

Saudi 'Whatever It Takes' Pledge Won't Move Oil Prices - Bloomberg:

Sometimes it can feel like your world is coming apart. In Saudi Arabia’s case, that is unfortunately somewhat true. Which is presumably why reports the country is considering all options to halt the slide in oil prices have bubbled to the surface over the past 24 hours. 


This isn’t the first time Saudi Arabia has deployed the whatever-it-takes weapon to beat back the bears. In May 2017, energy minister Khalid Al-Falih used that exact phrase when Brent crude had slipped below $50 a barrel. It sparked a brief rally, followed by a brief dip again, that ultimately segued into a sustained march toward $86 by the fall of 2018.

As bleak as things seemed to OPEC in May 2017, the organization actually had some favorable trends going its way. One of these was its own hesitancy to deliver on the production cuts agreed in late 2016. Apart from Saudi Arabia and the involuntary “discipline” of Venezuela and Angola, the rest of the group didn’t collectively get with the program until toward the end of 2017. In other words, there was plenty of room in May 2017 for many members just to do something, never mind whatever it took. Plus, U.S. sanctions against Iran were yet to kick in. Meanwhile, low oil prices were boosting global demand and suppressing non-OPEC supply, as U.S. shale operators were only just beginning to emerge from the shock of 2016.