Providence Resources - Oil Price - Saudi Arabia produces approximately 10.5m...

Saudi Arabia produces approximately 10.5m barrels of oil a day. The overall production is approximately 96.8m barrels a day with demand lets say at 95.4m. An surplus per day of approximately 1.4m barrels of oil. Oil as we know is inelastic i.e. an over production of 2% for example does not lead to a 2% price drop but rather a huge drop in price and vice versa an under production of 2% does not lead to a 2% increase but rather a spike in price. Given this and given the fact that the Saudis are holding all the OPEC members (that want to cut production) and all the non-opec members that would also agree (excluding the shale producers) would it not be a good idea for Russia, Venezuala, Iraq, OMA, Nigeria, Algeria, etc etc to say to the Saudis -- OK you go ahead and sell your oil for 30 dollars a barrel but we are now setting a minimum price of 50 dollars for our oil. So the market can have Saudi Oil at 30$ but if the other producers set a minimum price below which they will not sell their oil then the price will rise as the market needs the other 85m barrels of oil. The other producers between them can cut the necessary 2% of production whilst selling their oil for a much higher price. If they sell at 50$ for example this hardly encourages over production and in the longer term will also lead to a balanced market. They should call the Saudis Bluff