Has Saudis' bold gambit to let oil prices plunge worked?

PUBLISHED ON FEB 27, 2015 8:27 AM

The Organisation of Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria. The Saudi-led OPEC decision to maintain output levels and protect market share is having the desired effect - pushing prices down so far that they threaten to curb output in the US and other non-OPEC countries. -- PHOTO: BLOOMBERG

LONDON (Bloomberg) - Three months after Saudi Arabia made clear it was going to let oil prices keep tumbling, the strategy is showing signs of working.

U.S. drillers are idling rigs at a record pace, gutting investment plans and laying off thousands of workers.

Those steps highlight how the Saudi-led OPEC decision on Nov. 27 to maintain output levels and protect its market share is having the desired effect - pushing prices down so far that they threaten to curb output in the U.S. and other non-OPEC countries.

Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries, will maintain that tack when the group next meets in June, according to some of the world's biggest banks.