The global economy really needs high oil prices. “Forget the stagflation of the 1970s. Higher oil prices would be a boon for the global economy,” Bloomberg writes, covering a research note from Goldman Sachs. The report’s authors suggest that “The difference between today and the 1970s is that oil creates global liquidity through a far more sophisticated financial system. More sophisticated financial markets in the 2000s were able to transform this excess savings into greater global liquidity that increased asset values, lowered interest rates, and improved credit conditions that spanned the globe.”

That’s great, because OPEC is going to cut production — right? Well, maybe not. The theory back in September was that the cartel would reach a pact with non-OPEC members to support prices with a production cut of about 1 mn barrels a day, to total output of 32.5 mn barrels. The catch now: Saudi brinksmanship.

What’s Riyadh up to? Saudi Oil Minister Khalid Al-Falih — also known as “he who now refuses to honor his contracts with Egypt — was quoted yesterday as saying, “We expect demand to recover in 2017, then prices will stabilize, and this will happen without an intervention from OPEC. We don’t have a single path which is to cut production at the OPEC meeting, we can also depend on recovery in consumption, especially from the U.S.”

Would failure to reach a production cut be catastrophic? The Financial Times may be overplaying its hand a bit, but it certainly thinks so: “Some of the world’s biggest oil traders have delivered a stark warning to the Opec cartel, saying a failure to sign-off on a production cut this week will trigger another dramatic drop in crude prices,” the newspaper says, quoting the CEO of one of the world’s largest oil traders as saying that, “if they walk away without a deal the market will punish that result possibly [by] USD 10 a barrel or more.”