"The reason for the fall in oil price is due to the USA and OPEC countries trying to bring Russia into line RE their dealings with the Ukrainian situation. However OPEC can only continue with this for a maximum of three months. The USA can go on much much longer".
The above theory that was discussed at the AGM, did it by any chance come from PB?
Everything I read from economists and Oil Analysts tells a completely different story.
Most of the OPEC countries are producing oil at between $5-6 per barrel so I fail to see why they "can only continue with this for a maximum of three months".
The USA are the ones hurting as at these prices most of the Eagle Ford US producing companies will struggle to even break even due to high drilling costs.
The Saudi's are protecting their market share as they know that there is a heap of untapped Shale oil around the world just waiting to be drilled with the new fracking technology.
In Australia Chevron did a massive deal with Beach Energy to start developing the huge Shale reserves in the Cooper basin. By keeping POO low the Saudi's are preventing this massive resource being developed and its now looking like Chevron could even walk away from the deal.
The Ark will have the same problem as this resource is potentially so large that if the drilling results are really good the Saudi's will not want it developed as it could flood the market with surplus oil and gas.
This article is from the Economist 2 days ago and they don't use Ukraine as the reason for POO dropping.
http://www.economist.com/blogs/economist-explains/2014/12/economist-explains-4
Personally I wouldn't believe everything PB says (assuming it was him that said it).
