Oil traders continue to bid up the price of oil on a hope and a prayer . . .

Saudi Shift Brings Uncertainty on Oil

. . . they will lose their shirts on these trades, there is no support for the price of oil, demand is weak, supply strong, and no evidence anything will change that for a long time.

"'In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity,” he said, though he lamented that shift. “OPEC is in a difficult situation.”

In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would “remain committed to maintaining our role in international energy markets and strengthening our position as the world’s most reliable supplier of energy.'"

Right, like we have been saying, oil is a political tool being used by both Iran, and the House of Saud in the existential war between the Shia, and the Sunni. Saudi cannot stop or slow production to support price unless it can verify Iran and the Shia oil producers will as well. This is desperation selling to keep the price low, and limit Iran's income, while making desperate changes to the Saudi economy in an attempt to create gold from straw. 

Good luck on that.

The oil traders are as yet unwilling to believe that the House of Saud is actually willing to let the price tank. And so they continue to bid up the price on any minor problem, or supply bauble. But the metrics do not support pricing in this range without the House of Saud restricting the supply. Something the House of Saud has specifically said it will not do. 

Someone is going to get burned. Heh!