Posted on 01/13/2015 10:39:27 AM PST by thackney
AH they can’t be trusted LOL!
Wonder what we are giving to the Saudis in return?
Because they are Muslims....next question.
I tend to agree with this writing.
I think the Saudi’s are doing exactly what they said they are doing.
In return for what? Refuse to coordinate with the rest of OPEC to act as a Cartel and force prices higher by a coordinated cut-back?
I wonder if Saudi Arabia is letting oil prices fall as a way to weaken Iran, which is its biggest enemy.
Prince Alwaleed said yesterday that he agreed with ARAMCO not reducing production:
“Having said that, the decision to not reduce production was prudent, smart and shrewd. Because had Saudi Arabia cut its production by 1 or 2 million barrels, that 1 or 2 million would have been produced by others. Which means Saudi Arabia would have had two negatives, less oil produced, and lower prices. So, at least you got slammed and slapped on the face from one angle, which is the reduction of the price of oil, but not the reduction of production.”
Nice collateral damage. But they aren’t cutting production and losing market share to someone else. Their breakeven cost is <$20/bbl so they have a ton of headroom.
Saudis.
"... if there is a world-wide oil glut, the increased US production must certainly take part of the blame for it. "
Blame? Blame you say? I think CREDIT is the word the author was after. Or maybe not. One man's glut is another man's salvation.
"... if there is a world-wide oil glut, the increased US production must certainly take part of the blame for it. "
Blame? Blame you say? I think CREDIT is the word the author was after. Or maybe not. One man's glut is another man's salvation.
One has to remember that the Saudi’s cost of production is not just the cost of getting it out of the ground, but also the cost of keeping the local yahoos from trashing the infrastructure. That is probably the bigger expense.
I have doubts that all of Saudi's production is really that low. They have started enhanced oil recovery on Ghawar years ago. They spent $17 Billion on Manifa for 900,000 BPD of heavy, sour (cheap) oil.
Their problem, and most of the other producers, is their spending. They need oil back up to $106 to match what they are spending. They are quickly spending billions at these prices.
Where do you get <$20/bbl?
True. Grammer, punctuation and spelling are not this engineer’s strength. I make that same mistake too often.
Keep in mind, this guy sells to the oil companies. His business will be hurting. It is perspective. And this bust looks like it may be extensive and painful.
If consumption outpaces production, who’s oil is not being purchased?
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