According to today's Globe and Mail, Saudi Arabia is cutting back its production of crude by a cummulative 1 million bbls a day in order to shore up the price with, I believe the figure suggested, a minimum target of $55 USD per bbl.
"Saudi Arabia tightens on output again in bid to support prices" "Saudi Arabia, which has aggressively shaved its oil-output in a battle to shore up prices, is tightening its spigots further this week... (effective February 1st) 'After these cuts, our oil production will have declined by about one million barrels a day since last summer.'... nearly double the total cuts that SA agreed to make under two ouput reductions hammerered out by OPEC .... to around 8.5 million bbls a day." How does that accord with what Yoshie reports below? Is it possible that SA is having trouble keeping the spigots open due to declining production from the Ghadar field as Mat Simmonds has suggested? Or is SA not really interested in destabilizing Iran and/or undermining OPEC? Paul P Yoshie Furuhashi wrote:
Several European officials said in interviews that they believe that the United States and Saudi Arabia have an unwritten deal to keep oil production up, and prices down, to further squeeze Iran, which is dependent on oil for its economic solvency. No official has confirmed that such a deal exists.
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