It's necessary to scrutinize the talk that some OPEC members,...

It's necessary to scrutinize the talk that some OPEC members, and particularly Saudi Arabia, want to see oil prices at $80 or $100 a barrel, reversing a longstanding tradition of emphasizing market share over short-term revenues. Without question, the Saudi Arabian stance is a major influence on the price of oil, but even they do not have controlof the price.  Still, this talk could influence expectations of longer-term price trends (beyond 3-6 months) by suggesting to traders that the likely price range is higher than before.
This certainly suggests that the difference between $60 and $70 will not have a major impact on oil demand, and another $10 above that wouldn’t mean much in the short-run either. However, the question of the supply response could dominate in the $80-100 price range, and that needs careful consideration.

For the most part, in the short term, higher oil prices would translate directly into greater cash flow for producers. Costs would not immediately rise, although tax payments presumably would. An extra $20 a barrel would mean $an additional 20 billion in cash flow for Permian producers, and about $40 billion for all U.S. shale production. Assuming a third of that reinvested, you could be talking about 300 tb/d additional Permian production and 200 tb/d from other U.S. sources.Of course, a change of 500-800 tb/d/yr in non-OPEC supply might not seem like much, but it could make the difference between a market which is tightening and one which is weakening. If demand continues to be robust and Venezuelan oil production declines further, the amount can probably be absorbed without too much difficulty. But if demand moderates and producers like Iraq seek to increase sales (as appears to be happening), then the addition of more non-OPEC supply could be enough to cause Saudi Arabia to rethink the sustainable price of oil, especially if it appears that shale production will be stronger than most medium term forecasts.
Just some food for thought ..but morgan qoute .. $5.00 increase=.06c increase