Oil Slumps Below $32 After Saudi Oil Minister Warns "Can Coexist With $20 Oil"

It appears oil traders are disappointed with Al-Naimi's comments. Suggesting hopefully (for some) that the 'freeze' is the start of a process, al-Naimi then dropped the tape-bomb:

  • *SAUDI ARABIA WON'T CUT OIL PRODUCTION: NAIMI
  • *HIGH-COST PRODUCERS MUST LOWER COSTS OR LIQUIDATE: NAIMI

He then added that "not all the countries will freeze; The ones that count will freeze." WTI Crude (April) front-month futures have erasd yesterday's gains.

 

Live Fed here (click image for link)

 

Additional headlines:

  • *OIL FREEZE IS BEGINNING OF PROCESS: SAUDI MINISTER NAIMI
  • *MOST COUNTRIES THAT COUNT WILL FREEZE OIL OUTPUT: NAIMI
  • *HIGH-COST OIL PRODUCERS FACE `INEVITABLE' RECKONING: NAIMI
  • *OIL PRICE ROSE TOO HIGH LEADING TO SUPPLY INCREASE: NAIMI
  • *OIL MARKET WON'T SEE REPEAT OF EVENTS OF 1986: NAIMI
  • *OIL MKT WILL REBALANCE, DEMAND WILL PICK UP: SAUDI MINISTER
  • *SAUDI ARAMCO HASN'T CUT A SINGLE PROGRAM AMID SLUMP: NAIMI

And then added this...

  • *SAUDI ARABIA HASN'T DECLARED WAR ON SHALE OIL: NAIMI
  • *SAUDI ARABIA STILL HAS MORE ECONOMIC OIL RESOURCES THAN SHALE

And the most expliti threat:

  • NAIMI: WE CAN COEXIST WITH OIL TO $20/BARREL

Sure sounds like war?