"If these numbers prove to be accurate, and with the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term. In these conditions the short term risk to the downside has increased," the agency warned earlier this month.
Long-Term Attrition
As one of the lowest cost producers, with ample financial reserves, Saudi Arabia can eventually win any price war provided it pushes prices low enough for long enough.
There are serious questions about whether Saudi Arabia's strategy of flooding the market in the short term in order to strengthen its long-term position is worth the cost.
The improved techniques which enabled the shale revolution cannot be unlearned. If and when prices eventually rise, shale production will eventually increase again.
The cancellation of conventional, unconventional and frontier projects will be harder and slower to reverse but they too will eventually come back if oil prices recover.
The most durable gain Saudi Arabia can hope to achieve is if the price war scatters and dismantles much of the skilled workforce and ecosystem of specialist oilfield service and supply companies.
That would create a much bigger and longer lasting disruption of competing oil supplies which in turn will give the kingdom more pricing power in the medium term.
In the meantime, the strategy is costing the kingdom more than $100 billion per year in terms of extra borrowing and lower foreign reserves.
Rating agency Standard and Poor's estimates the kingdom will run budget deficits averaging 9 percent of GDP between 2016 and 2019.