Originally posted by kdog1982
What is really going on here,I mean,c'mon,the saudis are worried about the price of oil and the global economy?
Are they getting scared and wanting more protection from the US and it's allies?
It has been happening since OPEC was formed - indeed the Saudi ability to vary their output to maintain an oil price was one of the cornerstones of
OPEC - they had enough spare capacity then so that other member countries could literally produce as much oil as they wanted, and the Saudis would
"take up the slack" - but just enough to ensure a decent oil price.
this was standard teaching at Econ 101 level in the 1980's!
And as recently as oh...the mid 1990's (??) the Saudi's were supposedly keen on keeping oil at about US$25 ppb IIRC - a higher price being thought
to depress the world economy so much that they would actually lose revenue.
since those early days of OPEC production has increased and many OPEC countries have reneged on production agreements made from time to time, but
AFAIK the basis remains.
It isn't new.