Saudis could face revolt from Opec members

OPEC (the Organization of the Petroleum Exporting Countries) next gathers on Dec 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous Opec winter meeting the Saudi decision to let the oil market determine prices rather than to continue Saudi Arabia's role of guarantor of US$100-plus per barrel of oil.

Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow Opec members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices.

Presumably swayed by Saudi equanimity, financial markets do not see the Saudis abandoning their current policy before, during, or after the upcoming Opec meeting. CME Brent oil futures project continuity: as of Aug 18, CME Brent futures projected the price remaining below US$60 per barrel until June 2017. A CNBC poll of oil traders, analysts, and major fund investors, aired on CNBC on Aug 17, showed 95 per cent believing the Saudis will not alter course.