Saudi Arabia and some of its allies in OPEC have declared that they intend to 'Drill, Baby, Drill' in order to maintain their market share. Thus, market share maintenance is front and center, and this represents good news for oil production and supply throughout this year and beyond.
In turn that means lower and lower prices at the pump -- maybe much lower.
With the U.S. energy companies increasing energy output, and perhaps even with the heretofore clueless Obama administration permitting the export of some of this additional production, things are indeed looking up for lower oil prices globally.
And things are also looking up for a stronger economic recovery in America as well, which in turn will help Americans minimize the negative impact domestically of the growing economic and deflationary troubles in much of the rest of the world, especially in Europe and heavily oil dependent countries.
Saudis, other Gulf states to oppose OPEC output cuts has the morning's good news story for American consumers on the energy front:
"Gulf nations including Saudi Arabia, Kuwait and the United Arab Emirates are set to oppose any cut to OPEC’s oil production ceiling at next month’s meeting despite the continuing fall in global oil prices, according to several people familiar with the situation.
Despite the drop in prices, Gulf nations fear any lowering of the limit on the amount that can be produced by the Organization of the Petroleum Exporting Countries would lead to members of the cartel losing share in global oil markets. . . .
“Saudi Arabia and the rest of the Gulf countries have no intention whatsoever to accept the idea of a cut at the November meeting,” a Gulf OPEC official said. “If we are going to end up with lower market share, prices will fall anyway, let’s stick to market share.”
Another Gulf official said U.S. oil prices could fall to around $70 a barrel before substantial quantities of U.S. shale oil production become uneconomic.
OPEC is due to hold its next meeting on Nov. 27 in Vienna."
Lower oil prices represent good news for America's economy and America's consumers.
So let's relax a bit and watch the 'law' of supply and demand work its 'magic.'
We haven't seen a good old fashioned gasoline price war for a very long time.
Maybe we can even look forward to seeing a ~$2.50 price per gallon of gasoline sometime soon.
That would be a nice 'neighborhood' price, and that's my take.