Dear Oil & Energy Investor,
This week saw further signs that Saudi Arabia is rethinking its oil production strategy. As we've covered in Oil & Energy Investor before, last year Saudi Arabia led OPEC into a strategy of ramping up production to defend market share against U.S. shale oil and Russian oil exports to Asia.
As I discussed in Friday's Oil & Energy Investor, OPEC's strategy not only failed to destroy the U.S. shale oil industry, but has also led to the U.S. and Russia cooperating behind the scenes to make Saudi Arabia abandon its strategy.
The behind-the-scenes negotiations with the U.S. and Russia that I discussed on Friday, along with pressure from other OPEC members who need much higher oil prices to balance their budgets, seem to be working. Following Qatar's oil minister claiming that OPEC will consider Venezuela's request for an emergency OPEC meeting on boosting oil prices, reports now indicate that Saudi Arabia would consider such a meeting if it resulted in concrete action to increase crude prices.
This marks a change from Saudi Arabia's previous stance, which was to shoot down any suggestion of an OPEC meeting to discuss oil prices.
This is yet another sign that OPEC might be changing strategy while allowing Saudi Arabia to save face. I will keep you updated as the situation develops.
Kent
