The ACD Method

Maverick74 said:
I think prices can go a lot lower especially if we start to see economic growth curtail. Basically, what we have here is a great example of modern game theory. The players are fighting for monopoly power. Each firm's decision is predicated on what they think their opponent is going to do. The optimal strategy of course is to cooperate. This was the genesis behind the creation of OPEC to begin with. Through collusion, one can control supply and by proxy control market prices. Right now, price is determined by the market as oil is no longer a monopoly but a competitive marketplace. So the decision is, do you hurt yourself over the short term to squeeze out all the marginal suppliers, re-gain the monopoly and then take prices back up where you now control the market? It appears as though the strategy chosen by all here is not to cooperate and instead drive price down to zero. Long term implications? Oil will go parabolic in the not too distant future. It's really no different then hyper-inflation. You need hyper-deflation first to get to hyperinflation.
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well that's what the Saudis intend to do, having the pricing power. At first read it appears they are going to stick it to US Shale companies and also the countries that need the cash flow Russia, Iran, Venezuela, Rig trading at $21 a share......may you live in interesting times.
 
Wow I cant believe the market was actually expecting the referendum to pass. Leading up to the vote a number of polls were showing 48%-54% against it.
 
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