Publications: Notes at the Margin

The New (Maybe Temporary) Dynamics of Oil Pricing (May 18, 2015)


Saudi Arabia is apparently now producing at high rates while holding significant volumes off the market. The latter will likely be added to the Kingdom’s production next fall, which would ensure ample supply for the world and keep prices from spiking again. In adopting this strategy, the Saudis will force analysts to change how they examine oil market behavior. Prices will likely be higher than expected through late spring and summer but lower than anticipated this winter. Firms hoping for $70 per barrel or even $75 to restart fracking may be out of luck.


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