Saudi Arabia Won't Let Oil Head Back To $20s Again

Saudi Arabia and American frackers are gearing up for the second oil war.
It will take oil lower, but not back to $20 again.
Saudi Arabia has kept its promise. It has cut oil output by 486,000 barrels a day, in line with the OPEC agreement the Kingdom pulled together last October, helping oil stabilize above $50 per barrel.
And it has set up an example for the rest of OPEC and Russia, who have kept their own promise to stick with the October accord, officially at least.
For a while things in the oil market seemed like back in the old good



days: oil prices headed north, approaching the magic number of $60, and the Saudi Kingdom was talking up its grand plan, the Aramco IPO.
But in the last three days the oil market has gotten oversupplied, and oil prices are heading south again, dropping below the other magic number, $50.
Apparently, American frackers—the new swing producers—did it again. They have flooded the market with oil to fill in the shortfall generated by OPEC and Russia, as evidenced by the rise in oilrigs—up 288 from last year to 768, and the growing US oil inventories.