Posted 3/25/2020 21:17 (#8139005 - in reply to #8138585) Subject: RE: Price of oil reason
Per market advisors emails:
The shale deal a few years ago changed the geopolitical balance.
OPEC died (big Venezuela flop among others) but OPEC+ is kind of around, chiefly run the by Saudis and the Russians
The Saudis asked the Russians to agree to joint production cuts to keep the price relatively constant in a slowing world economy.
This would result in the Russians losing market share to shale (price vs share)
The Saudis care less about that that being able to buy what they want (share vs price)
Apparently the Russians care, or just figured out they could cause mischief, so they said no.
The Saudis preemptively struck by cutting their prices to China and anyone else who was buying, and told Russia they would flood the market come April 1 by pumping, but not until April 1, which is a clear warning shot.
Pretty clear big egos are involved - MBS and Putin.
World economy pretty clearly in a pause as well, with slow down causing backups of petroleum and petroleum products.
Market advisor believes immense pressure will be placed on Russia to back down and get the oil price since world runs on petrodollar, whatever that is.
Deadline is April 1 when current agreement expires and new proposed agreem..nt was to begin, Saudis claim they are gonna pump big starting then.