Saudi’s are losing $500 Million per day with this charade, and giving away more of their life blood at half the cost. It is a suicide mission. They will bankrupt companies and even countries, but in the end, they will stop giving away the store.
This activity cannot sustain.
However this is a huge economic, debt-less stimulus to the American economy entirely caused by fracking, and Obama did everything in his power to limit it, or stop it. He reduced drilling on federal lands, yet tries to take credit for it. The smiling stupid believe him.
This activity cannot sustain.
There are so many things wrong in those few words, it's hard to know where to start...
The Saudis are not "losing money", they are simply making less than before, which is still a huge profit. At worst, they may have to sell off some foreign holdings while they adjust. They might also have to slow down purchases of foreign assets that won't pay off handsomely in the short or medium term -- and if that means they are not buying US debt, that's more likely to be trouble for us than them.
The Saudis have essentially decided they don't want to give up market share, and if they can ding Iran at the same time, great. Indeed, their "charade" consists essentially of "failing" to greatly decrease production, but instead they have put much effort into building their own plastics (etc.) industries. It appears they see more of a future in value added petro products, in the future, than in being a "gas station" like Russia. IMO, the Saudis are most likely correct.
Further, the Saudis really have no choice. As more and more production in the US and elsewhere comes on line, at a break even point somewhere in the $35 to $50 range, that "overcapacity" sets the upper limit on prices. If the Saudis cut production, and temporarily drive prices back up to, say, $80 / barrel, that only encourages the $50 producers all the more. The US has already surpassed Saudi production, and much more capacity (in the way of competition to OPEC) will come online in the US and elsewhere if prices are high.