I don't know enough about the oil market to make a judgment on this, but its an interesting read on market dynamics if nothing else. And, if it introduces you to Mark Perry, that's not a bad thing at all either.
- Saudi Arabia ... decision not to cut production ... was an attempt to kill U.S. shale production. Citing the nearly 60% drop in the U.S. oil rig count since October and the slowing of U.S. oil production, they are claiming a brilliant triumph.
- But rather than kill the U.S. shale revolution, the Saudis have only made it more resilient, sped up its rate of technological innovation and capped oil prices for at least a half-decade or more.
- U.S. shale producers will survive and grow. American consumers, paying less for gasoline and heating oil, will be the big winners.
- The U.S. shale industry is by necessity becoming more efficient than ever. Low oil prices have become an opportunity. The Saudis have lit a fire under producers to trim the fat, deploy new productivity-boosting technologies and zero in on the most productive geology.
