Oil, wow, WTF happened to all of the oil bugs on this site?

[Cardboard]

What I am getting at is that this market is insanely manipulated. As StevieV pointed out, the amount planned to be released over 7 or 8 years is immaterial and this is only starting in over 2 years.

 

The end result of this never ending media and political negativity for oil will be a world that will be severely undersupplied in a few years time. This will not help but, hurt the U.S. and its allies. Price spikes are never good for consumers. Instead of having a decent oil price that would still allow world production to decline to meet demand (say $60), we are having this crazy downswing that will create dislocations in the future.

 

If you don`t think that a never ending negative drumbeat hurts prices despite not being firmly grounded with fundamentals, ask a Valeant shareholder...

 

I will tell you who benefit from this: Goldman Sachs and greedy bankers. They benefit by shorting oil futures. And they benefit by locking in hedges at low prices for worried oil producers. They will also benefit from M&A and restructuring that will take place.

 

Cardboard

 

 

[shhughes1116]

What I am getting at is that this market is insanely manipulated. As StevieV pointed out, the amount planned to be released over 7 or 8 years is immaterial and this is only starting in over 2 years.

 

This market, and every other market since the beginning of mankind, has been manipulated in some fashion by market participants. 

 

In the case of oil, I don't think it is that hard to forecast the trajectory.  Overproduction leads to lower prices, lower prices lead to reduced production and increased demand, demand begins to increase along with corresponding declines in production which causes tightening of supplies, and tightening of supplies eventually yields increased production.  Although the pricing and volume may change, this cycle occurs consistently. 

 

So who gives a crap if Goldman starts pumping and dumping, or if the United States starts releasing oil from the SPR, or if a bunch of monkeys in suits get on CNBC and start prognosticating about the price of oil, or if Elon Musk blatantly and frequently manipulates his stock price through Tweets and other social media...this is just noise.

 

The real question is whether or not you can make money in a manipulated market.  As a small player with a flexible time horizon, I have a pretty good idea of when to put money to work in the oil cycle, and when to start taking it off the table.  My timing is far from perfect (as evident by some of the red in my brokerage account from getting into certain names a bit too early in the cycle), but in general, I think I can use the bulls**t described above to benefit myself, and I think you can do the same.

 

So instead of getting frustrated by the bulls**t manipulation, use it to your advantage to make some money.     

 

 

[Uccmal]

What I am getting at is that this market is insanely manipulated. As StevieV pointed out, the amount planned to be released over 7 or 8 years is immaterial and this is only starting in over 2 years.

 

This market, and every other market since the beginning of mankind, has been manipulated in some fashion by market participants. 

 

In the case of oil, I don't think it is that hard to forecast the trajectory.  Overproduction leads to lower prices, lower prices lead to reduced production and increased demand, demand begins to increase along with corresponding declines in production which causes tightening of supplies, and tightening of supplies eventually yields increased production.  Although the pricing and volume may change, this cycle occurs consistently. 

 

So who gives a crap if Goldman starts pumping and dumping, or if the United States starts releasing oil from the SPR, or if a bunch of monkeys in suits get on CNBC and start prognosticating about the price of oil, or if Elon Musk blatantly and frequently manipulates his stock price through Tweets and other social media...this is just noise.

 

The real question is whether or not you can make money in a manipulated market.  As a small player with a flexible time horizon, I have a pretty good idea of when to put money to work in the oil cycle, and when to start taking it off the table.  My timing is far from perfect (as evident by some of the red in my brokerage account from getting into certain names a bit too early in the cycle), but in general, I think I can use the bulls**t described above to benefit myself, and I think you can do the same.

 

So instead of getting frustrated by the bulls**t manipulation, use it to your advantage to make some money.     

 

 

 

Well said.  Both Cardboard and myself were real early in the oil game (see pwt/pwe thread). Actually a surprising lack of red in my holdings.  It can be frustrating getting in too early - value investors curse, as you know.  The cycle is normally shorter for oil - at least it seems that way but the view, here, in the fishbowl, may be obscured. 

[tede02]

It is interesting to watch all the dynamics of the energy markets play out.  US production is finally declining, but other world players keep pumping.  Below is an interesting article on how the Middle East states are being negatively impacted by low prices (massive budget deficits).  I wouldn't be surprised if oil goes lower in the short-term, but it's extremely hard to see low prices persisting, say, 3 years out (unless that corresponds with a significant world economic slowdown). 

 

http://money.cnn.com/2015/10/27/news/economy/saudi-arabia-gas-subsidies-cheap-oil/index.html?iid=surge-grid-dom

 

 

[wachtwoord]

What I am getting at is that this market is insanely manipulated. As StevieV pointed out, the amount planned to be released over 7 or 8 years is immaterial and this is only starting in over 2 years.

 

This market, and every other market since the beginning of mankind, has been manipulated in some fashion by market participants. 

 

In the case of oil, I don't think it is that hard to forecast the trajectory.  Overproduction leads to lower prices, lower prices lead to reduced production and increased demand, demand begins to increase along with corresponding declines in production which causes tightening of supplies, and tightening of supplies eventually yields increased production.  Although the pricing and volume may change, this cycle occurs consistently. 

 

So who gives a crap if Goldman starts pumping and dumping, or if the United States starts releasing oil from the SPR, or if a bunch of monkeys in suits get on CNBC and start prognosticating about the price of oil, or if Elon Musk blatantly and frequently manipulates his stock price through Tweets and other social media...this is just noise.

 

The real question is whether or not you can make money in a manipulated market.  As a small player with a flexible time horizon, I have a pretty good idea of when to put money to work in the oil cycle, and when to start taking it off the table.  My timing is far from perfect (as evident by some of the red in my brokerage account from getting into certain names a bit too early in the cycle), but in general, I think I can use the bulls**t described above to benefit myself, and I think you can do the same.

 

So instead of getting frustrated by the bulls**t manipulation, use it to your advantage to make some money.     

 

 

 

Well said.  Both Cardboard and myself were real early in the oil game (see pwt/pwe thread). Actually a surprising lack of red in my holdings.  It can be frustrating getting in too early - value investors curse, as you know.  The cycle is normally shorter for oil - at least it seems that way but the view, here, in the fishbowl, may be obscured.

 

I'm way in the red. I very often get in 'too early' and exit 'too late'.

[Cardboard]

U.S. oil inventories were up 3.4 million barrels vs expectations of 3.7 million. Last night API reported a build of 4.1 million.

 

The positive aspect of the EIA report this time around is the overall decrease in petroleum inventories which has not happened in a very long time or down 3.7 million barrels: Gasoline down 1.1 million, Distillates down 3.0 million, Other oils down 2.5 million. Last week it was propane that had not declined in ages being down. This week it was exactly flat.

 

So products consumption has been pretty solid while the crude oil inventory build is diminishing from previous weeks (was 7 to 10 million barrels/week for a few) with refineries coming back on line with the end of their maintenance season.

 

Now, if we could get accurate data from these people on production that would be great. Lower 48 States production was up 1,000 barrels/day last week. What a joke! Likely a typo since last week it was exactly flat from week to week. At least play with the numbers! Make it look like you are trying to estimate the real number vs posting the same number week after week...

 

http://ir.eia.gov/wpsr/overview.pdf

 

Finally of note, Line 9B reversal between Sarnia and Montreal should startup fairly soon with 240,000 barrels per day. It would have started in July but, the NEB requested hydrostatic testing. This should seriously improve shipment of crude oil out of the middle of the continent improving pricing for Canadian oil and reduce buildup at Cushing in Oklahoma.

 

Cardboard

[sculpin]

Just spent 3 days in Alberta. Layoffs accelerating, ramifications of the NDP ascension to power are beginning to hit home and all think it will be lower for longer. Reminds me of the below Don Coxe quote.....

 

“The most exciting returns are to be had from an asset class where those who know it best, love it least, because they have been hurt the most.”

 

- Don Coxe

[Cardboard]

http://finance.yahoo.com/news/p-just-downgraded-saudi-arabia-201114559.html

 

Downgraded and they have not borrowed much yet. Wonderful! Make them pay!

 

Cardboard

[KinAlberta]

What I am getting at is that this market is insanely manipulated. As StevieV pointed out, the amount planned to be released over 7 or 8 years is immaterial and this is only starting in over 2 years.

 

This market, and every other market since the beginning of mankind, has been manipulated in some fashion by market participants. 

 

In the case of oil, I don't think it is that hard to forecast the trajectory.  Overproduction leads to lower prices, lower prices lead to reduced production and increased demand, demand begins to increase along with corresponding declines in production which causes tightening of supplies, and tightening of supplies eventually yields increased production.  Although the pricing and volume may change, this cycle occurs consistently. 

 

So who gives a crap if Goldman starts pumping and dumping, or if the United States starts releasing oil from the SPR, or if a bunch of monkeys in suits get on CNBC and start prognosticating about the price of oil, or if Elon Musk blatantly and frequently manipulates his stock price through Tweets and other social media...this is just noise.

 

The real question is whether or not you can make money in a manipulated market.  As a small player with a flexible time horizon, I have a pretty good idea of when to put money to work in the oil cycle, and when to start taking it off the table.  My timing is far from perfect (as evident by some of the red in my brokerage account from getting into certain names a bit too early in the cycle), but in general, I think I can use the bulls**t described above to benefit myself, and I think you can do the same.

 

So instead of getting frustrated by the bulls**t manipulation, use it to your advantage to make some money.     

 

 

 

Well said.  Both Cardboard and myself were real early in the oil game (see pwt/pwe thread). Actually a surprising lack of red in my holdings.  It can be frustrating getting in too early - value investors curse, as you know.  The cycle is normally shorter for oil - at least it seems that way but the view, here, in the fishbowl, may be obscured.

 

I'm way in the red. I very often get in 'too early' and exit 'too late'.

 

Beyond any kind of manipulation people underestimate the systemic forces driving down costs and so, competitive prices.  The beauty of distress and bankruptcy sales of productive plant is that today's gone concern, can become tomorrow's "going concern".

 

Then there's the effect that Buffett talked of with airlines, where bankruptcy protection allowed companies to undercut the pricing of previously soundly managed companies offering competitively priced seats. Bad money driving out good, I guess. Or, the good old deflationary death spiral. 

:-)

[rkbabang]

Then there's the effect that Buffett talked of with airlines, where bankruptcy protection allowed companies to undercut the pricing of previously soundly managed companies offering competitively priced seats. Bad money driving out good, I guess. Or, the good old deflationary death spiral. 

:-)

 

I never did understand what possible purpose allowing corporations to have bankruptcy protection served.  It protects the poorly run firm from the consequences of its decisions at the expense of its creditors and competitors.  If you just let poorly run firms die and allow the creditors to split up and sell off any assets, then the creditors get something and the better run competitors have one less competitor and can remain strong.  Like every form of protectionism it protects the bad actors at the expense of the good actors, inverting the incentives, and makes the entire industry/economy weaker.  It's like watering the weeds and poisoning the flowers.

 

[Parsad]

http://finance.yahoo.com/news/p-just-downgraded-saudi-arabia-201114559.html

 

Downgraded and they have not borrowed much yet. Wonderful! Make them pay!

 

Cardboard

 

LOL!  +1.  Cheers!

[philly value]

Then there's the effect that Buffett talked of with airlines, where bankruptcy protection allowed companies to undercut the pricing of previously soundly managed companies offering competitively priced seats. Bad money driving out good, I guess. Or, the good old deflationary death spiral. 

:-)

 

I never did understand what possible purpose allowing corporations to have bankruptcy protection served.  It protects the poorly run firm from the consequences of its decisions at the expense of its creditors and competitors.  If you just let poorly run firms die and allow the creditors to split up and sell off any assets, then the creditors get something and the better run competitors have one less competitor and can remain strong.  Like every form of protectionism it protects the bad actors at the expense of the good actors, inverting the incentives, and makes the entire industry/economy weaker.  It's like watering the weeds and poisoning the flowers.

 

I understand the sentiment but I think a world without the Chapter 11 process would be much worse for virtually all parties involved. On the creditor side, the best interests test which is a requirement to confirm a plan of reorganization addresses pretty firmly the idea that creditors could obtain a higher recovery in a liquidation. A plan is only confirmed if it can be shown to provide recoveries to creditors higher than recoveries in a liquidation.

 

A "bad business" which should no longer exist, in which the market value of the assets is greater than going-concern value, should not emerge from Chapter 11 as a reorganized business. Do some slip through the cracks, of course, but this is the guiding principle behind the process - the purpose being that for a very large number of situations, the company has a capital structure that doesn't work with the financial reality, but is still worth more as a business than a bunch of assets to be liquidated.

 

The one area where there is obviously a net loss to the system is advisory fees, which tend to be very substantial in a prolonged Chapter 11. That said, even in a liquidation if there is contention among the creditor classes there would likely still be substantial legal fees, if not the same level of financial advisory fees.

 

 

 

 

 

 

[colinwalt]

Oil Is Heading Higher, According To Andrew Hall

 

http://www.valuewalk.com/2015/12/oil-andy-hall

 

"The hedge fund manager sometimes called “the oil G-d” is having a rough year, but is not backing down from his thesis. According to Christian Berthelsen of The Wall Street Journal, who first reviewed the letter, Hall’s fund lost 9.7% in November, bringing YTD losses to $26%. This would make 2015 the worst year for Hall since 2008 when the hedge fund was founded."

 

"In fact, Hall’s research shows that the crude oil the market is much closer to being balanced and “for gasoline, the market is almost certainly in deficit given phenomenal demand growth in the U.S. and Asia.”

EIA data for September shows gasoline demand in the U.S. grew 4.5% compared to a year earlier. Vehicle Miles Traveled grew at a similar rate, while fleet efficiency fell for the first time in eight years as buyers switched to trucks and SUVs. In India, gasoline demand increased by over 14% percent in October with auto sales up by almost 22%. Apparent demand for gasoline in China grew by nearly 11% in October: SUV sales were up 60% year-on-year.  Analysts from Credit Suisse estimate that burgeoning car sales in China will result in gasoline demand there growing by around 300,000 bpd during 2016."

 

"... global spare production capacity is wafer-thin, and as the oil sector slashes jobs to cut costs, there is a question of how well the industry can respond to any upturn in demand. As a result, “the virtual inevitability of higher prices down the road leads to a simple conclusion: now is not the time to exit the market,” he said. "

[opihiman2]

Sounds like all out war between Russia and SA:

 

http://www.telegraph.co.uk/finance/economics/12046185/russia-opec-saudi-arabia-bluff-40-oil-price.html

 

Wasn't this done in the 80's? 

[Cardboard]

Russia should not accept to suffer for years. They don't have to.

 

Saudi Arabia Achilles heal, other than their finances and supporting a welfare state, is transporting their oil: super tankers. You restrict that in any kind of way and they cannot compete. They are stuck with their oil.

 

There is a war going on just South of Saudi Arabia in Yemen and the Houthis are friends of Iran. Russia is also a friend of Iran currently. How hard would it be for Russia to supply the right equipment or knowledge to the Houthis to sink a tanker or two right around Aden?

 

Do you also believe that the Russians have forgotten about the West helping that revolution in Kiev? What if they were planting the same seeds in Riyadh? Accusations would be made but, like in Kiev who would know if they were truly behind it? Could not declare war to Russia over that.

 

Or helping some agitation with the Shiites of Saudi Arabia or right where they have their giant Ghawar field? Then the Iranians could come to the rescue of their brothers who are being massacred both in Yemen and Saudi Arabia.

 

Cardboard

 

 

[asterisk]

Why we think that low oil prices are here to stay for many years:

http://www.dalalholdings.com/blog.html

 

New drilling (shale) technology has unleashed large quantities of crude oil unforeseen by many.

 

Oil producers find themselves in a "Prisoner's Dilemma" (a la Game Theory): they want others to stop producing, but can't stop themselves.

 

As in the natural gas industry, Wall Street encouraged shale production growth over profits and drillers hence oversupplied the oil market.

 

Key Insight: Because shale oil production can be ramped up and rapidly brought to market, shale will put a ceiling on oil prices, not a floor.

 

Interesting thought is that the shale supply will only be reduced if there are bankruptcies.. Otherwise the shale producers only need a small period of time to turn back on their operations.

 

It cannot be ignored that the long-term consequences of oil at sub-40 levels will lead to higher debt loads and political instability in oil dependent nations. Saudi Arabia cannot cut their social welfare and subsidies. The fear is that if the subsidies and welfare is cut then there will be protests and the population will turn against the government. The Saudis can deal with these prices for a couple years but it will be interesting if they will want to put that strain on themselves.

[Uccmal]

Why we think that low oil prices are here to stay for many years:

http://www.dalalholdings.com/blog.html

 

New drilling (shale) technology has unleashed large quantities of crude oil unforeseen by many.

 

Oil producers find themselves in a "Prisoner's Dilemma" (a la Game Theory): they want others to stop producing, but can't stop themselves.

 

As in the natural gas industry, Wall Street encouraged shale production growth over profits and drillers hence oversupplied the oil market.

 

Key Insight: Because shale oil production can be ramped up and rapidly brought to market, shale will put a ceiling on oil prices, not a floor.

 

Interesting thought is that the shale supply will only be reduced if there are bankruptcies.. Otherwise the shale producers only need a small period of time to turn back on their operations.

 

It cannot be ignored that the long-term consequences of oil at sub-40 levels will lead to higher debt loads and political instability in oil dependent nations. Saudi Arabia cannot cut their social welfare and subsidies. The fear is that if the subsidies and welfare is cut then there will be protests and the population will turn against the government. The Saudis can deal with these prices for a couple years but it will be interesting if they will want to put that strain on themselves.

 

Except, where will they get the money?  If there is one thing we have seen since 2008; it's once bitten twice shy.  This applies to investors, oil workers, suppliers who have been stiffed, etc. 

[Uccmal]

Russia should not accept to suffer for years. They don't have to.

 

Saudi Arabia Achilles heal, other than their finances and supporting a welfare state, is transporting their oil: super tankers. You restrict that in any kind of way and they cannot compete. They are stuck with their oil.

 

There is a war going on just South of Saudi Arabia in Yemen and the Houthis are friends of Iran. Russia is also a friend of Iran currently. How hard would it be for Russia to supply the right equipment or knowledge to the Houthis to sink a tanker or two right around Aden?

 

Do you also believe that the Russians have forgotten about the West helping that revolution in Kiev? What if they were planting the same seeds in Riyadh? Accusations would be made but, like in Kiev who would know if they were truly behind it? Could not declare war to Russia over that.

 

Or helping some agitation with the Shiites of Saudi Arabia or right where they have their giant Ghawar field? Then the Iranians could come to the rescue of their brothers who are being massacred both in Yemen and Saudi Arabia.

 

Cardboard

 

I have tried to work this through from a logic perspective - yeah right. Everyone involved in the middle east cluster***k, would benefit from higher oil prices, except the EU and China.  For Iran and North Am.  it is not a necessity to have higher prices with diverisified economies.  For Russia, Iraq, and Saudi it is. 

 

From my perspective it seems that certain parties have an active interest in destabalizing Saudi, and Iraq.  Russia for sure, would benefit by seeing the Houthi's in control of Aden, and seeing a supertanker sunk, or a significant attack on Saudi oil fields.  Many are making money selling weapons to the aggrieved parties ( ISIS, al Queda, the Houthis, the Saudi Shia's, what have you).  At some point a major pipeline gets blown or a tanker sunk.  An act of all out obiteration of any one faction will result in desoarate moves by that group against the oil industry. 

 

The executions held in Saudi strike me as an act of desperation to achieve who knows what.  They wanted to scare the minority and send some kind of message to Iran.  What they may accomplish is a full on armed conflict on their own soil.  The EU and US aren't stupid.  No one wants to be seen as being too close to a regime in SA that may change any time, so you bring Iran in from the cold.  It sure is a dog's breakfast, with conflicting motives, and strange mixes of ideological differences and economics. 

 

 

[SharperDingaan]

We put it to you that within the next 12-18 months the existing House of Saud is gone; the current leadership either assasinated, or replaced by elder statesmen – to ensure that the house survives. Beheading a cleric was an incredibly stupid and incendiary action. Everywhere else, there would have been a simple - but permanent slip and fall.

 

US support will expire within the next 12 months as Obama exits. The region will also be a lot safer for all with the war over, and materially higher crude prices. Record global inventory awash with low cost crude, will minimize supply disruption.  It is pretty hard to find a better time.

 

SD

 

[asterisk]

We put it to you that within the next 12-18 months the existing House of Saud is gone; the current leadership either assinated, or replaced by elder statesmen – to ensure that the house survives. Beheading a cleric was an incredibly stupid and incendiary action. Everywhere else, there would have been a simple - but permanent slip and fall.

 

US support will expire within the next 12 months as Obama exits. The region will also be a lot safer for all with the war over, and materially higher crude prices. Record global inventory awash with low cost crude, will minimize supply disruption.  It is pretty hard to find a better time.

 

SD

 

It would be very interesting how the US would react to an attack on the House of Saud.

 

Correct me if I'm wrong and I don't want to involve political opinions. But a republican in office would be a plus for the Saudi relationship?

[SharperDingaan]

Politicians will readily take contributions from all ME players, OPEC, and the US oil industry; their sponsors in turn - back both parties to ensure a win. Comes payday it will simply be cheapest to throw the House of Saud under the bus; & collect on the promises from the rest of the ME, OPEC, & the US oil industry. States don't have friends, they have 'interests' - and 'interests' have limited shelf lives. 

 

SD

[Artha158]

Self-interest is the core of all relations.

[Pelagic]

I too have trouble understanding KSA's actions in regards to executing the cleric. They knew it would piss off Iran and other Shia groups that they're currently fighting but perhaps more importantly, it makes it harder for the US and other western "allies" to support them. Why not keep him in a dark hole somewhere, I just don't see what they gain from taking a hardline stance on this. I've kind of avoided incorporating the powder-keg in the ME into my oil investment thesis, if something happens then oil will probably spike but it's such a wild card I'd rather look at the situation without it. However, I think several posters in this thread have made a point I tend to agree with, there are a lot of groups who would benefit from an attack on SA's oil infrastructure that are also capable of executing such an attack. These groups run the spectrum from Iran and Russia to Yemeni rebels to ISIS, will the US pull security duty over SA's oil infrastructure if an attack happens to prevent a repeat and protect the global flow of oil?

[meiroy]

 

 

We put it to you that within the next 12-18 months the existing House of Saud is gone; the current leadership either assasinated, or replaced by elder statesmen – to ensure that the house survives. Beheading a cleric was an incredibly stupid and incendiary action. Everywhere else, there would have been a simple - but permanent slip and fall.

 

US support will expire within the next 12 months as Obama exits. The region will also be a lot safer for all with the war over, and materially higher crude prices. Record global inventory awash with low cost crude, will minimize supply disruption.  It is pretty hard to find a better time.

 

SD

 

Huh?

 

The cleric was of a small minority in the country, backed by a country (Iran) that is already in proxy war with Saudi for awhile now. There's nothing new here, from both sides.

 

"The House of Saud", as you call it, is extremely rich and powerful; they for sure will not be replaced from within nor would they be shot down from the outside.  They have the full support of other nearby countries which share the same interest (resisting Iran's proxy wars) and of course local religious leaders with a very specific religious view of the world.

 

And what war will be over exactly? Please. Egypt and Iran will also suddenly become happy friends? Iran will stop supporting proxy war in Yemen and various other locations?

 

The centuries old war between Sunni and Shia will continue, in one form or another. And considering global economy's path, it might only get worse.

 

This was not 0.02 cents on where oil will be a year from now, just on the content which is some sort of a twisted confirmation bias to support a thesis.

 

 

[goldfinger]

 

 

We put it to you that within the next 12-18 months the existing House of Saud is gone; the current leadership either assasinated, or replaced by elder statesmen – to ensure that the house survives. Beheading a cleric was an incredibly stupid and incendiary action. Everywhere else, there would have been a simple - but permanent slip and fall.

 

US support will expire within the next 12 months as Obama exits. The region will also be a lot safer for all with the war over, and materially higher crude prices. Record global inventory awash with low cost crude, will minimize supply disruption.  It is pretty hard to find a better time.

 

SD

 

Huh?

 

The cleric was of a small minority in the country, backed by a country (Iran) that is already in proxy war with Saudi for awhile now. There's nothing new here, from both sides.

 

"The House of Saud", as you call it, is extremely rich and powerful; they for sure will not be replaced from within nor would they be shot down from the outside.  They have the full support of other nearby countries which share the same interest (resisting Iran's proxy wars) and of course local religious leaders with a very specific religious view of the world.

 

And what war will be over exactly? Please. Egypt and Iran will also suddenly become happy friends? Iran will stop supporting proxy war in Yemen and various other locations?

 

The centuries old war between Sunni and Shia will continue, in one form or another. And considering global economy's path, it might only get worse.

 

This was not 0.02 cents on where oil will be a year from now, just on the content which is some sort of a twisted confirmation bias to support a thesis.

 

You bring good points but confirmation bias has now become like a mandatory counter-argument in most discussions these days. It seems it has become very fashionable to use it to look like a rational thinker/value investor.

 

It is undeniable that tensions have escalated in the middle-east and muslim world (spilling over to the west) over the last 15 years and are exponentially quickly rising now...

Iran still remembers the war with Iraq as if it was yesterday and looks at SA as one of the main culprits.

The house of Saud has weakened positions and needs to maintain its stature as religious leaders or else...

Putin is in Syria for influence and money - I am sure he cannot wait to destroy oil production (SA's for example) if they give him a good cover/pretext. He would then become the provider of last resort...

USA/Europe have played their cards for now with military on the ground in the ME and need to play their own proxy wars (special forces + native troops raising/training) to try to influence the course of events in conflicts there... The main local powers now feel capable of freely applying their influence in the region and fight each other (to death may be?)...

Maybe noting will happen, but all conditions are met for a major crisis to unfold (one incident TURKISH style would do it) and potentially eliminate significant oil production from arab countries for example - Putin/Iran would love it... Their armies/missiles are close by as the yesterday's Yemeni attack on saudi oil depots shows.

Not to say it will happen you must admit that the probability is elevated and is not related to confirmation bias...