The price of arrogance.

[786Trader]

Suspending disbelief temporarily in order to digest the magnitude of arrogance displayed by MBS and Vladimir Vladimirovich. In a last man standing battle of wills, it would appear both Saudi and Russia are prepared to risk all in a winner-takes-the-least bid to see who is more arrogant and who has superior power. (In this case who has the capacity to destroy the price of oil). Naturally, for consumers this is a boon. However, this is an unsustainable war. Already the strategic reserves are in play and Russia is committed to pumping more oil than ever, at a price that is not even profitable. All to prove a point. This does not please the oil producers of USA or even Norway who cannot possibly make a profit on oil on current margins. Only Saudi can. But not for long.  Frankly, it is a tad depressing (but not surprising) to think the leaders of the world are so arrogant, such is the disadvantage of unconstrained power. Or cheap energy, which ordinarily would be a positive. In the case of a finite resource like oil it is astonishing. Financially, the price war is unsustainable making oil futures are very tempting indeed.

[dmedin]

Saudi Arabia is clearly a great ally of Britain and the USA, considering how many weapons we sell to them and how we turn a blind eye to their corruption and backwardness!  Their grotesquely over-the-top cities are Meccas to our nouveau riche salespeople

Edited March 10, 2020 by dmedin

[Guest Gadge]

Or, they work in tandem to rid the world of a competitor. 

[Bopperz]

4 hours ago, Guest Gadge said:

Or, they work in tandem to rid the world of a competitor. 

I 100% agree.

Is this Russia vs Saudi or both of them vs US shale.

Shale has some bad characteristics: It is more costly than other markets. There is a lot of debt in the companies. When the pumping starts it produces a lot of product very quickly and floods the market, before tailing off.