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NEW YORK (Reuters) - Saudi Arabia has cleared up any doubts about its unhappiness with oil prices above $100 a barrel but last week's OPEC meeting has done nothing to dispel speculation that the kingdom may be willing to see crude go much lower for a while.
Crude's collapse from near $130 a barrel earlier this year has been brought about by a slowing world economy and determination on the part of Saudi Arabia to force the world to sit up and take notice when it flexes its supply muscles.
Saudi policy also appears to have subtly shifted. In 2008 Riyadh insisted it was supplying the market with all the oil that consumers wanted, this time it has taken steps to ensure that is really happening.
Crude traders say Saudi pricing has made it easier to step up purchases of additional barrels. But buyers enthusiasm for additional supply has sometimes been limited.
The sharp backwardation in the forward curve of Brent crude futures has been a huge disincentive to stockpiling oil. Nevertheless, Saudi has taken on the task (and apparently some of the cost) of moving oil out of the kingdom and into tanks elsewhere in the world.
Last week's OPEC meeting merely ratified this policy.
Officially the exporters' group wants to portray the decision as a commitment to cut output back to the 30 million barrels per day ceiling agreed last year.
But behind the scenes Saudi Arabia has given no indication it considers itself more bound by this target than before.
Recall that after the 30 million bpd target was adopted, Saudi Oil Minister Ali al-Naimi pointedly said he would supply the market with the oil it needed, regardless of the ceiling.
At the time these words were perhaps taken lightly, given that they repeated the official Saudi line that has been heard for years.
But coupled with a new determination to push oil prices down, this is a slogan for an activist production policy.
Indeed, the most important thing that happened at last week's OPEC meeting was probably what did not happen.
Saudi officials were very guarded on oil policy, particularly on their approach to dealing with a fall in oil prices below $100 a barrel.
In public and in private, there were no strong reassuring words that Riyadh was poised to cut back its own crude oil production to keep the market stable.
So we know that Saudi is at least saying they do not want an abrupt shift in the price of oil. But they may well tolerate a slow decline to lower levels.
An important factor here is the strategic importance of Saudi Arabian oil output to the world economy and its usefulness as a tool to put pressure on regional rival Iran.
With growth in Europe, China and the United States looking weak, Saudi, as a member of the G-20, must feel pressure to do something to aid the world economy.
Lower oil prices, even for a short period, may well help.
For all the talk of high social spending capping the downside to oil prices, it has to be remembered that substantially higher oil production and prices earlier in the year have given a big cushion to Saudi Arabia to absorb a period of lower prices.
Similarly lower oil prices heap pressure on Iran to make concessions on its disputed nuclear program, something which is in Saudi Arabia's long-term strategic interests.
But the above is pure speculation. There has been limited guidance on Saudi motivations behind oil policy beyond the usual talk of stable markets.
Indeed, if the above two considerations are the prime motivations of Saudi policy, they come from above the Oil Ministry.
If so, traders' assumptions about Saudi policy may well be simple guesses.
But what has been made clear is a preference for the downside. Saudi Arabia has tolerated a huge increase in global oil stocks and has exhibited little enthusiasm for draining these inventories quickly.
So even if Riyadh moves to rein in production, it may only do so gradually. That could mean prices remain below $100 a barrel for a while as inventories slowly decline.
One final thought. Saudi officials have rarely shown much goodwill towards speculative markets. Downside ambiguity, especially when it keeps the bulls in check, may well prove to be a more permanent feature of Saudi policy.
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
Editing by Sofina Mirza-Reid