The Saudis and OPEC have a pretty limited ability to affect prices at this point without screwing themselves. They have simply lost the power they had in the 70s.
Yes, they are screwing themselves short term, or at least hoping it is ST, from what I've read.
IIRC, they did this same thing back in the mid-80's (suppress the price to drive other producers out).
The Saudi's have a pretty good size cash reserve from what I've read. Apparently, they're willing to draw on that to 'fund' this gamble.
Russia and Venezuela are taking it in the shorts. Likely some other OPEC members too.
Obama hasn't done a ton to open up US oil production. Personally I'm fine with that. It is pretty funny that conservatives were so eager to blame him for high gas prices and yet are mysteriously silent now though, considering that he hasn't done much to affect them either way.
There's nothing mysterious about any silence regarding Obama now. He's got nothing to do with this development. Even if he were so inclined I don't see how he could do anything significant anyway.
OTOH, this gambit certainly precludes any criticism of Obama regarding his refusal to open federal lands. The oil price is so low no one cares and if, as I have read, the price won't be rebounding for 5 yrs no producers are likely terribly interested ATM anyway.
But will be interesting to see what happens in the future, near or otherwise. Are the Saudi's mistaken and will they lose this gamble? Or, will they be able to drive out our producers? As usual, if things get too out of whack, the law of unintended consequences could rear its head and we'll have some real problems on our hands, or at least someone may have problems on their hands.
Seems to me a rather risky ploy by the Saudi's. I'm curious as the motivation(s) pushing the Saudi's. I have not considered them such risk takers before. Why now?
Fern