Ignore the talk of an OPEC price war, say crude market bulls. Oil’s next move was spelled out in Saudi Arabia’s own words.
Price cuts announced by the Saudis, including the biggest discounts for Asiasince 2008, sparked speculation that the world’s biggest crude exporter would let oil tumble rather than cede market share to rivals in OPEC. This is misguided, said UBS AG and BNP Paribas SA. Brent is below the $95-to-$110 range endorsed by Saudi Oil Minister Ali Al-Naimi, ensuring the country will curb output, they said.
Brent, the European benchmark, fell into a bear market amid a surplus of U.S. shale oil and weaker economic growth. The discounts prompted predictions that Saudi Arabia would tolerate lower prices to deter investment in higher-cost U.S. shale. The advance of Islamist militants across a swathe of Iraq and Syria means the kingdom will shore up oil prices to support neighbors instead, BNP Paribas said.
Rather than stoke competition with other nations in the Organization of Petroleum Exporting Countries, the lower prices were intended to revive profit margins for Asian refiners, a person familiar with Saudi policy said yesterday.
History shows that Saudi OSP cuts precede decreases in production, not increases
In light of this it looks pretty oversold... on the RSI but these energy stock fall are in line with others we have had in the last 3 years.. this one has been a bit steeper and comes on the back of the AUD scaring off US investors...
