The SA – US Stand-off

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Two articles caught my eye, offering more insight into the current low oil price and reasons for it.

I’ve blogged about this a few times recently (probably too many, if you’re not interested in this sort of thing) the reasons for Saudi Arabia to keep pumping oil into the system despite reduced demand and thereby lowering the oil price. This seems at first sight odd for a country that makes a living from selling oil.  However, the reasons for SA to continue this policy (for it is they, rather than Opec driving this) are several – maintain market share, hurt Russia, hurt Iran, curtail the US shale gas revolution.

Three out of four are certainly being achieved but not the last.  As this article reports, US Shale Gas continues to boom and the lower oil price is driving innovation rather than closing facilities down.

In fact in a third story I read this week, the US are stepping up plans to export natural gas in liquid form to Europe. This will be welcomed by Europe as it will ease the reliance on Russian gas.