They can flood the market for as long as they have foreign reserves. Over the last several years, Russia has steadily reduced its budget's dependence on oil revenues, and bolstered foreign reserves/gold. They probably do have enough foreign reserves/gold to outpump the Saudis and drive the price so low that the Saudis start burning through their own reserves.

And I believe Putin has a stronger grip over his own people than MBS, so in a race to the bottom I think Russia could definitely come out "on top".

I really dislike the article's mention of "balanced budget" oil prices, it distracts from more salient arguments when presented alone. For proper analysis, the author should have provided more numerical data, like foreign/gold reserves, budget comparisons (historically, and across countries), etc.

>> Demand will come back after the pandemic is over.

Man, I go back and forth with myself/other people over this all the time. I think there's a significant risk that energy consumption will be lower in the temporary short- and mid-term futures, and slight risk that energy consumption will also be lower in long-term future.

Take a look at US consumption: https://en.wikipedia.org/wiki/Energy_in_the_United_States#Pr... https://www.eia.gov/totalenergy/data/monthly/pdf/sec1_7.pdf We still haven't reached 07/08 levels of energy consumption, of which 67% is nat gas/oil. I also read a while back that US households have steadily decreased their individual usage of energy post-2008, despite economic gains. I forget where, I think it was in an article about nuclear power plants.

With that said, I think global outlook (for oil consumption) over the next 5 years is not good for developing economies. Their economies will suffer until developed economies recover and stimulate their under-developed economies. However, long-term population growth in SE Asia and Africa will demand greater energy consumption and I believe economic growth in these regions will be the primary drivers of greater oil consumption. That's because renewable energies will be much, much more expensive than non-renewables (until we tax the hell out of them) and developing economies must pursue the most cost-effective alternative.

Sorry, for the long response, I just love this shit.

user:	afjl
created:	January 13, 2018
karma:	140