OPEC won't cut output even at $20 a barrel: Saudi

[MADem]

13. This has little to do with us. We aren't in charge of this evolution.

The Saudis and OPEC have a two pronged strategy working. First, they don't want USA or Canada to have a reason to expand shale oil production or step up fracking to meet energy needs. THEY want to be the Big Suppliers. The only way they can do that is to be competitive so that's what they are doing--keeping their price competitive. It's all about supply and demand, after all. As Lead Dog at OPEC, they have a large role in setting the agenda, but they aren't acting unilaterally. They'd rather make less money, but keep it rolling in, than not make any money at all. They'll just have to try to find efficiencies to keep the expenses down to mitigate the profit loss.

Second, the Saudis are looking down the road to a time when Oil is not King, and they are investing in other technologies. They intend to stay in the energy game--they know it, they understand it--but their next adventures will be in the Renewables Game.

Do we benefit from the lower oil prices? Sure--everyone does in the short term, but we (and they) aren't so foolish as to think this is gonna last. What we need to do is use this bit of breathing room to get ready for the next big thing. The smart people will be using the lower energy costs to build factories that will produce solar panels--the dummies will be buying reconditioned Hummers!