[Ghost of SVR4]

There are a couple freepers (apologies, their screen names escape me) that can explain the fine line between drilling our butts off and the impact it can have locally as the price drop actually means lower output in the long run (costs more to extract than to sell). I don’t know all the numbers, but we should not be exporting our “energy” or means to produce thousands of products through petroleum. Let the Suad’s twist, let opec fall apart. I’m not talking total isolationism, but I am talking use our own stuff at a price point that keeps our own companies thriving and our costs low; it can be achieved.

[rodguy911]

The simple explanation for much, not at all, but for much of the drop in the price of oil is found in Saudi Arabia. The Saudis are lowering their price because they are scared. They are very worried about the amount of oil now available in the United States and North America via fracking. Shale gas and oil. And it's been reported in a number of official publications that the amount of oil, the reserves that are available in the United States and North America since fracking has become affordable, the reserves we have are greater than the reserves in Saudi Arabia. Now, the Saudis have owned the notion that they have the world's greatest supply of oil. And they are threatened gravely by this. They are lowering the price that they are charging in order to strangle their competition, which is in this country, in the Dakotas, anywhere where there is shale gas and oil and fracking going on. We got a Big Oil boom in this country, and they are doing everything they can in Saudi Arabia to strangle it. They're trying to lower the price, get it to the point where it's no longer profitable or sensible for the companies in this country to continue to frack and produce the oil. About $65 a barrel is that price, and the Saudis are doing what they can to get that price down there.

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The above is Rush's take. It is true if the Saudis can slow us down fracking more costly to get oil they will do it for a while. Not forever but for a while. Truth is fracking is not unique to the US. Many other countries worldwide are taking a hard look at fracking. So if the Saudis can slow them all down for a while they will do it no question!

What Rush has conveniently ignored probably because he read it here and does not always want to seem in agreement with us lowly bloggers is that historically the Sauidis have always lowered their production to accommodate keeping the prices up.

At ten and a half million barrels per day,their current production, all they have to do is cut it in half and prices stabilize.

Screwing us,the newbies in the fracking world, is about 1/3 of the equation but the other 2/3 of the equation is Russia and Iran. Russia is desperate to create a pipeline that goes through Syria a close ally that will feed new customers energy from them. They want new markets and when the get them they squeeze the last drop of profit out of them like in the Ukraine an elsewhere.

this would permanently screw the Saudis. They don't want that to happen(unless its their pipeline) so they lower prices to screw the Ruskies. Even more important is the fact that the Iranians want to turn the kingdom into glass and have for some time.

It's the old Sunni vs. Shia BS with the Mullahs the shia and the kindgom embracing Sunni. So there you have it Rush is 1/3 correct.