Faisal KhanAnswered Feb 12, 2015I don't think the Saudis will cut production. The falling oil prices are already affecting the US shale/fracking oil production, so the overall supply excess in the market will be reduced eventually. The Saudis would like to see the US shale/fracking oil business go out of business. It cost Saudi's between $5-$6 to get the oil out of the ground, their cost of production is much lower, and they have adequate financial reserves.
The toughest part about playing chicken is knowing when to flinch. I think the Saudis are pretty good at this game.
The toughest part about playing chicken is knowing when to flinch. I think the Saudis are pretty good at this game.