The Saudis have oil supply 100 percent backward

As various general news media and oil-watch outlets heat up over Saudi Arabia's attempt to get an oil production freeze from OPEC members and, it hopes, from Russia as well, looking back in hindsight, maybe Ali Al-Naimi should have gone back to old Saudi ways rather than venture into a brave new production world from which his successor, current Saudi oil minister Khalid al-Falih, is trying to pick up the pieces.

That said, it wasn't all his fault. His predecessor, Ali al-Naimi, recently noted that, in late 2014, as an oil oversupply already loomed, fellow OPEC members refused to tighten the taps. Al-Naimi started the decision to keep oil flowing without taking all the hits on cuts itself, and even pumping more.

Al-Naimi led the Saudi oil desk for 20 years, and in previous world, or OPEC, gluts, as the biggest producer, and for his whole time, the so called "swing producer" for the world, would tighten its own taps only. But, largely to smack down US shale oil, he said no.

I think he got it totally wrong.

He should not just have done previous Saudi-style cutting, but even more.

One of the elements of American shale oil is that its success is somewhat a will-o'-the-wisp and certainly short term. Yes, fracking shale formations will produce more oil than conventional drilling, and in tight formations will produce oil where it couldn't be gotten with a conventional process.

However, it doesn't produce that much more oil in wider shale formations, let alone in fracking to improve on non-shale drilling. It does produce some more, but not an incredible amount.

Rather, part of its dazzling effect is simply to increase the flow rate of oil in production. That's it.

If the Saudis had been smart, they would have whacked their production twice as much as in the past, let the price hit $100/bbl, and let many of America's newly-fracked oil wells pump themselves halfway dry in half a dozen years, if that long.

KSA then swoops in to pick up the pieces.

That's IF a "little" new shale oil find in the Permian doesn't totally upset oil production applecarts.