They always say that the Saudis are trying to end US fracking, which requires $70/barrel on average to be sustainable, but I'd say they are also trying to deal a severe blow to Russian oil, which requires about $45/barrel to be sustainable. Saudi Arabian oil only requires $25/barrel to be sustainable. It may not be to hurt Putin directly but rather to exploit the fact that Russian oil companies can't get financing (due to sanctions) to pay off loans, fund new operations, and expand. Saudi's 2 biggest competitors are USA and Russia, so this strikes 2 birds with 1 stone. At least the USA will also substantially benefit from cheap oil (the vast majority of its economy will benefit). For Russia, Venezuela, and others this could cause severe macroeconomic problems as oil sales make up a huge part of their economies....In 2012 a Citigroup report warned that Saudi would run out of oil to export by
2030. The Saudis use a lot of their oil to produce electricity, and demand is growing.
Saudi Arabia is supposedly accepting lower prices to maintain its market share. Why sell oil at $20 a barrel when it is a finite resource? Rationing supply to keep prices as high as possible would seem to deliver more value, which has always been the Saudi strategy. It would appear that OPEC's ability to fix prices is a thing of the past. They may be hurting rival producers like Iran, Russia and the US. They are also killing themselves....While this is obviously welcome as a consumer, I can't help think that this is all going to end badly, for guess who, yes you and I.
With the dollar in a precarious decline and inevitably coming towards the end of its life a s the global reserve currency, with the absolutely dire condition of the US/European economies, it's going to come crashing down again... even call me Dave said so about a month ago (The "warning lights on the dashboard of the global economy" speech), possibly the only accurate thing he's said for a couple of years.
Make hay, don't keep cash in banks, choose your preferred commodity and hold your nose as we head over the edge (once again) some time soon.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, January 2, 2015
They always say that the Saudis are trying to end US fracking, which requires $70/barrel on average to be sustainable, but I'd say they are also trying to deal a severe blow to Russian oil, which requires about $45/barrel to be sustainable. Saudi Arabian oil only requires $25/barrel to be sustainable. It may not be to hurt Putin directly but rather to exploit the fact that Russian oil companies can't get financing (due to sanctions) to pay off loans, fund new operations, and expand. Saudi's 2 biggest competitors are USA and Russia, so this strikes 2 birds with 1 stone. At least the USA will also substantially benefit from cheap oil (the vast majority of its economy will benefit). For Russia, Venezuela, and others this could cause severe macroeconomic problems as oil sales make up a huge part of their economies....In 2012 a Citigroup report warned that Saudi would run out of oil to export by
2030. The Saudis use a lot of their oil to produce electricity, and demand is growing.
Saudi Arabia is supposedly accepting lower prices to maintain its market share. Why sell oil at $20 a barrel when it is a finite resource? Rationing supply to keep prices as high as possible would seem to deliver more value, which has always been the Saudi strategy. It would appear that OPEC's ability to fix prices is a thing of the past. They may be hurting rival producers like Iran, Russia and the US. They are also killing themselves....While this is obviously welcome as a consumer, I can't help think that this is all going to end badly, for guess who, yes you and I.
With the dollar in a precarious decline and inevitably coming towards the end of its life a s the global reserve currency, with the absolutely dire condition of the US/European economies, it's going to come crashing down again... even call me Dave said so about a month ago (The "warning lights on the dashboard of the global economy" speech), possibly the only accurate thing he's said for a couple of years.
Make hay, don't keep cash in banks, choose your preferred commodity and hold your nose as we head over the edge (once again) some time soon.
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