Economics Drove Saudi OPEC Move

Scanning the latest intelligence on oil markets, Saudi Arabian officials came to an upsetting conclusion this month: the kingdom’s oil policy wasn’t working.

Saudi energy minister Khalid al-Falih’s attention was drawn to an Organization of the Petroleum Exporting Countries’ prediction that a global glut of oil would persist well into 2017, said people familiar with the matter. The data suggested that economic pain from low oil prices would last longer than the ministry first believed, as the Saudis fought an expensive war in Yemen and middle-class living standards eroded.

“The pressure was mounting,” said a person close to the Saudi oil ministry. “Falih and the government realized they need to show they are not just watching their economy and others suffer.”

http://www.wsj.com/articles/economics-drove-saudi-opec-move-1475191887