OPEC, for some quiet moments..

[admin]

And the oil price collapse keeps on keeping on......

And it becomes ever more likely, IMO, that the conditions are being put in place for an oil price spike high enough to damage the world economy.  The capacity worldwide to respond quickly to high oil prices to increase production is being destroyed.

Yes, the longer this goes on, the more future supply is challenged.

And there are other scenarios which are pretty likely:

• A supply squeeze as a result of a crisis in the Middle East
• A revolt within OPEC (even Saudi Arabia is bleeding heavily economically, let alone many of the others)
• An economic collapse of an oil producing country

What I don't see is US shale being knocked out:

• Yes, much of it is way overleveraged, but these assets will be taken over for pennies to the dollar when assets get really distressed and bankruptcies start rolling in
• It's much easier to recover production when prices start rising
• It has been forced to increase productivity and reduce cost.

So the Saudi's strategy still doesn't make much sense to me. They're knocking out tar sands, deep sea, arctic, yes, but not US shale, and I think the cost (to themselves and other OPEC members, and to OPEC itself) far outweigh the benefits, IMHO.