Saudis To The Oil Market: Get Used To Lower Prices ($80 A Barrel?)

BI ^ | 10-13-2014 | Ron Bousso and Joshua Schneyer

[blam]

Ron Bousso and Joshua Schneyer, Reuters
October 13, 2014

LONDON/NEW YORK (Reuters) - Saudi Arabia is quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.

Some OPEC members including Venezuela are clamoring for urgent production cuts to push global oil prices back up above $100 a barrel. But Saudi officials have telegraphed a different message in private meetings with oil market investors and analysts recently: the kingdom, OPEC’s largest producer, is ready to accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations.

The discussions, some of which took place in New York over the past week, offer the clearest sign yet that the kingdom is setting aside its longstanding de facto strategy of holding prices at around $100 a barrel for Brent crude in favor of retaining market share in years to come.

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[bestintxas]

one more perspective

http://seekingalpha.com/article/2560725-could-the-shale-oil-miracle-be-just-a-pipe-dream?ifp=0

[Praxeologue]

Thanks for the insight.

Do you agree with these numbers from Bloomberg? I don't know where they got them, or what ROE they represent.