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To: mountn man

Reports I have read, place Saudi Arabias actual need for oil cost around $86-$88/bbl, to keep the government solvent.

I see it over $100 for income to match outgo. Less than that requires less government spending or continued spending of cash reserves, like they are now. It can only stay low so long before the reserves are gone.

http://graphics.wsj.com/oil-producers-break-even-prices/


44 posted on 01/13/2015 11:44:57 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
At $86 or +$100/bbl, we agree. It can only stay low for so long.

My estimate of $141 BILLION was based on a $40/bbl deficit. Make it $60/bbl and it becomes $211 BILLION deficit a year.

Another $10/bbl drop in price would mean another $35 BILLION a year in deficit.

I've recently read that it was estimated that SA has about $900 Billion in cash reserves.

If we use your numbers of +$100/bbl need and see oil drop another $10/bbl, we could watch SA have a deficit of $21 BILLION A MONTH.

That eats into cash reserves rather quickly. In a little over 3 years time their reserves would be gone.

3 years might be a little ways away, but this dropping in oil has been going on for 6 months already.
I guarantee the bean counters are noticing.

47 posted on 01/13/2015 12:07:14 PM PST by mountn man (The Pleasure You Get From Life Is Equal To The Attitude You Put Into It)
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