Saudi Oil

Interesting piece in the NYT about the Saudis finally getting nervious and increasing oil production to lower prices. While you’d think that they would be happy with $140/barrel, the truth is that nefarious “alternative fuels” are becoming cost-competitive. They’re also planing on bringing a whole new field online next year.

The question is, how do the markets respond to this, and can the Saudis actually single-handedly keep prices down. That may not be possible any more.
Update: the markets have responded, and they obviously don’t think the Saudis have the goods here.