Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Even closer.

A gift card is binding on the issuer who will show them on their balance sheet as obligations. If I have a John Lewis gift card they cannot refuse to accept it - as an alternative to £ - in payment for goods on open sale.

The Saudis could possibly cut enough supply for the current oil oversupply to clear, but probably only by ditching long term supply contracts.

As it is the current market oversupply; plus global stocks; plus falling demand (possibly); plus liquidation by funds; plus trade speculators finally jumping in to 'short' the market; yada yada, together mean that standing in the way of the steam-roller would be an expensive option and of course means they are sacrificing their own interests to help out everyone else.

I think the market has some way further to go before other market players - OPEC and Non-OPEC - realise collective discipline is necessary.

The Saudis will always honour their gift cards when presented, because they have no other option: they could never sue a customer who has prepaid, for non-payment of dollars, could they?

What is happening now, I think, is that the Saudi blether about maintaining market share is a smoke screen which post-rationalises the delivery of prepaid oil onto the market thereby repaying 'oil loans'. These deliveries of prepaid oil free up pre-sold Dark Inventory and enable the Saudis to gain in respect of this amount of oil as and when the market price recovers.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Jan 3rd, 2015 at 04:31:46 PM EST
[ Parent ]

Others have rated this comment as follows:

Display:

Top Diaries

Occasional Series