| Analysts at Deutsche Bank explained, as oil prices go down, they squeeze high marginal cost production sources, outside the Middle East, while fiscal pain extends to all producers where energy is a large share of GDP and exports.
"The outstanding question remains – who will blink first, the high marginal cost producers, or some of OPEC’s lower cost producers faced with severe budget constraints? The market is uncertain about the point where these two tensions enforce substantial production rationalization, but with oil sustaining prices below $40/b, we are surely much closer to the point of supply restraint...............................................Full Article: Source
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