Saudi's may be finally ready to crack

http://www.business-standard.com/article/pti-stories/saudi-minister...

I tried to post this yesterday with a much better article that I cannot find today.

Anyhoo, the Saudi's have used their muscle to crush oil prices in a poorly thought out plan they hoped would gut American shale oil producers.

Didn't work out too well for them.

What it did is cause the Americans to become much more efficient and allowed them to become the worlds swing producer, at a gain for opec of a few measly bankruptcies.

Hold onto your mineral rights and your future royalties, I feel a lot more certain of the decent prospect for a price rebound in the next year or so. Just remember, since 2007 oil prices went up to $148, down to 30, back up to 115 and now down to 35, all in just a few years.

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Permalink Reply by Booger on December 17, 2015 at 4:19pm

the Saudis have plenty of oil, but are running out of reserve cash because of the price drop.....they pay their citizens in order to stay in power....everyone is receiving generous handouts.....the govt is running out of money to keep that up........govt's in that part of the world are overthrown regularly......

Permalink Reply by Joseph-Ohio on December 17, 2015 at 6:06pm

No sympathy here.

Ain't gonna find it at this address.

Nope.

Good luck to us right here in the U.S.A.

Permalink Reply by Clye thomas Williams on December 22, 2015 at 11:51am

Saudis didn't really care about the US production and fracking and maybe have thought to wait 2-3 years after the fracking craze began...knowing that the fracked fields would go into decline in the 3-5 year spans.  Saudia was more concerned about fuel-efficient/electric cars and wanted us to get more SUV...which we have.  They also were concerned about OPEC quota violators (Nig./Veneuz.) and the non-OPEC Russia connections via pipelines to China and Europe....Then remember when they did their Quota move....everyone was planning the 2015 drilling programs and were probably waiting on Corporate approvals....just the right timing...So in one move-Not Moving Production they stopped everyone in their tracks...can you get any better???   So Now How LOW and How LONG...  

Saudia can survive >2 years..10 years ago...cost deliver onboard tanker was $12/bbl...so lets say $20 now....plus say $10/bbl delivered US/Rotterdam...$30/bbl is still competitive - break even...no losses....

How many Dakota or Nigerian or Russian people can break-even at $30...delivered.  So lets say $35 til 2018Feb....Can anyone really frack 5000ft at even $55...my estimates now maybe at $75...Long way to go.

As one Texan told me 30 year ago..."Being a millionaire isn't all that good...I have been one several timesssss.

Permalink Reply by Joseph-Ohio on December 22, 2015 at 12:56pm

Can't tell what the Saudi / OPEC strategy is myself - all I can see are the results.

I think that when we (our country) have had enough of it however / when our leadership grows back their kahonas (and uses them for our benefit) there will be some sort of reckoning / hell to pay.

Not nice to bite the hand that has been feeding them.

JMHOs

Permalink Reply by RJMB on December 22, 2015 at 3:14pm

Saudi Arabia will have spent all of their foreign reserves in about 30 months, which means they will be living "paycheck to paycheck". Folks need voice their support for more gas powered power plant conversions (of which 8 are scheduled for southern Ohio) and migrating state and federal transportation to CNG. The federal government has about 250,000 vehicles, USPS has about 211,000 and our military doesn't have a clue, perhaps 500,000. Each year we consume about 185 billion gasoline gallon equivalent (GGE) of gasoline and diesel fuel as a nation for transportation. Every 1% we move from gasoline and diesel fuel to CNG will further reduce the price of gasoline and diesel fuel at the pump and stabilize the already low price of natural gas. Stable to rising natural gas prices will put money into American landowners hands and not the Saudi Sheiks. The federal government will spend less on fuel, and the auto industry will have adequate demand for CNG powered vehicles to begin offering them ready to go. A win-win for everyone.

Permalink Reply by Joseph-Ohio on December 22, 2015 at 3:56pm

Conversion subsidy (from gasoline and diesel to natural gas) instead of subsidizing intermittently available wind / solar.

On your bus about all the remainder of your reply.

I want even more commitment to natural gas domestically than you write of however.

I expect that from our leadership.

Been disappointed so far.

Good luck to all of us in this.

Permalink Reply by Joseph-Ohio on December 23, 2015 at 3:43am

By virtue of NOT subsidizing domestic conversion to natural gas on a grand scale we subsidize all of the rest of the world's programs to do so.

I for one have had more than enough of that monkey business.

Convert the military's vehicles LAST not 1st (if at all / ever) - save the diesel and and gasoline for military use.

Permalink Reply by Joe on December 23, 2015 at 7:27am

We have our future energy needs right here. Absolutely, cng cars/trucks. Nat gas power plants. Sounds great. Till... they start exporting it driving up the price. Killing/stopping the conversion to Nat gas and cng  cars/trucks/power plants in its tracks.

 Profits for a few. A relatively small percentage of the United States compared to low energy prices (heat, electric, fuel for transportation for all Americans. When the price of fuel for transportation goes up everything trucks haul goes up.

Permalink Reply by Joseph-Ohio on December 23, 2015 at 8:22am

Joe,

Even the worst of the scene you paint immediately above looks far better / much more appealing and in step with what appears to be better for the U.S.A. than the crap that's going on now.

Think about it my friend / neighbor.

JMHOs

J-O

Permalink Reply by David Allen Lilly on December 23, 2015 at 7:08am

A lot of good comments on the thread.

1) There is and has always been collusion and manipulation in pricing oil and gas.

Just in the last few days prices around here for gasoline shot up from $1.65 to $1.99, magically, all at once, nearly every station I drive by. We know there is no shortage or market condition to justify the bump. It is purely a profit driven collusion because of the holiday driving that will take place for the next week.

2) Low energy prices are a good thing for the consumer but the economy of President Chickenwing would have been even more pathetic if not for the energy industry. I am not a Glenn Beck crybaby but I cannot believe that our economy can survive the gutting of the only successful industry since the boosh recession. The numbers cannot add up when you consider the hit to the energy industry and the fact that there is really nothing else that has been driving employment and corporate spending on a larger scale.

3) I believe the Saudis may be borrowing to float their prolific welfare spending instead of tapping cash reserves, it is other nations who cannot do this and who must borrow to cover losses for their own state owned energy companies. Many if not all of these countries who must borrow have wrecked economies and must pay very high costs to borrow to keep their economies afloat.

4) We are now the swing producer and I hope we use our newfound power as such to punish our enemies and reward our friends, but we will probably be stupid and cowardly instead, it is what we do now.

You guys enjoy your Christmas !!

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