Clearly a counter the herd statement. Of course, depending on where you stand, this is either good or bad news. If you’re among the many hoping for Putin and the Ayatollahs to be driven from power by disloyal citizens unwilling to continue down the fast road to poverty, then this is not a welcome prophecy. On a more pedestrian scale, if you’re a purchaser of fossil fuels, then this is also not good news. However, should you be a peddler of the goo then it will make you happy.

Abelard has put pencil to paper and done the math and come to the conclusion that a sharp spike in price is but around the next corner. He reckons that Saudi Arabia is getting about 308 million dollars a day, less expenses, by selling 7ish million bpd of crude on the open market at just under $44/barrel (for the Brent crude variety). If they let the nice American frackers keep producing all they can, without trying to punish them for taking away market share, as they have been doing for some months now, and themselves cut back their own production by about 2 million bpd, they will do much better. Indeed, the price would fairly soon double and they’ll be selling 5 million bpd at $88/barrel. That would make them better off by some $132 million dollars per day. This is about a 43% jump in revenues, for those who prefer relative measurement.

So, what are they waiting for? The Saudis are going broke. Probably don’t want to look like they’re throwing up their hands in a price war they started. Their decision will be preceded by some lamentations about how sorry they feel for their suffering OPEC cousins like Iran and Venezuela, and perhaps some hand wringing about how much these low prices are hurting Harper’s chances of being reelected Prime Minister of Canada in Next October’s polls.

You heard it here first. Generous rewards will only be accepted in viable currencies; no Canadian dollars, any future Greek Drachmas, Ruthenian Pengos or barter goods like crude oil, copper, gold or small furry animals.