Death comes to us all. Life's but a walking shadow | The problem with saying you're cutting production but don't is that oil gets shipped by big tankers or by pipeline or trains and these things are countable, especially tankers. You might get away with cheating for awhile but eventually word gets out. As for these sovereign producers, like you say they figured on at least $90 oil in their budgets. I suspect that some big international banks have been bankrolling them for the difference for some time now but at some point the banks will say "no more." When that finally happens they will get serious about cutting production.
If you knew where to look for the appropriate figures as to spending, debt, oil production, etc you probably could calculate when this will begin to happen. Especially if you knew how far the banks will let them go.
But you don't really need to try to figure it all out. Sooner or later those that know will signal it with a consistent sustained rally in the price of crude. Either that or some morning you'll read about a fiscal crisis in one or more countries. |
Tug of War
