31–40 of 62 posts
Earlier quoted context omitted.
There's probably never a better chance to crush competitors, now that demand is low and high-cost private wells are fragile.
This is the answer. They think they can send US shale into bankruptcy before they go bankrupt themselves.
Earlier quoted context omitted.
There's probably never a better chance to crush competitors, now that demand is low and high-cost private wells are fragile.
This is the answer. They think they can send US shale into bankruptcy before they go bankrupt themselves.
I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?
No...if balance of payment is negative, that means they are pushing money out of the country. Presumably there is a corresponding flow of goods inward, so the "wealth" does not change as such.
The imported goods may of course be consumed (e.g. Swiss chocolate, movies), or put to productive use (e.g. a lathe, education), or just stored (e.g. gold).
Earlier quoted context omitted.
There's probably never a better chance to crush competitors, now that demand is low and high-cost private wells are fragile.
This is the answer. They think they can send US shale into bankruptcy before they go bankrupt themselves.
I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?
It's a stupid move, because the tech and reserves won't go away. As soon as prices rise again to levels needed by Saudi Arabia the reserves will be exploited again. Probably they hope that banks give less money and hedges to shale companies, but that won't work long-term. Saudi Arabia may see civil unrest soon as the house of Saud need all the money they can to spend on social welfare to stay in power.
There could be investment inertia and reluctance. After all, it's possible that the oil producer companies play the "price war" again.
I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?
You are assuming that the saudis didn't hedge. Being the "first mover" in this case, they would have had ample time to hedge against any drop in oil prices. Of course when they decide to cut supply and increase oil prices, they could bet on oil futures and make a lot of money beyond the selling of oil itself.
> What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?
Putting frackers out of business is that same old nonsense financial "news" has pushed the last 10 years. If someone at bloomberg actually knew what they were talking about, especially about the saudis and their oil plans, they wouldn't be slaving away at bloomberg. They would trade oil/commodities and retire in a day. A journalist at bloomberg knows about as much about the saudis plans as a journalist at espn knew about brady's plan during free agency. They know nothing. All they do is spew conjecture for clicks.
Oil is a geopolitical tool. It's an election year. Low gas prices make voters happy. Someone likes the saudis and the saudis like that someone. Also, low oil prices hurt venezuela and iran more than anyone else and will cause the suffering of many people. 2+2=5. Your guess is good as any from bloomberg.
Earlier quoted context omitted.
This is the answer. They think they can send US shale into bankruptcy before they go bankrupt themselves.
Doesn't make sense. They could just buy US shale. I think the answer is Saudis are brainless. There is enough evidence.
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At $30/barrel they’re selling oil at a loss, not building up wealth to invest elsewhere.
No... the Saudi oil production costs are circa US$10/bbl, and their marginal production costs (ie costs to produce one more barrel) are circa US$3.00. They are not selling at a loss, but they are not making enough to run their country (that would take prices of ca US$80/bbl at the current rate).
So without further measures to run the country differently, that effectively means they are losing money and not 'building wealth', right?
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Bankrupt the fracking companies in America and deprive Russia of money so they can’t effectuate greater sphere of influence in the Middle East through Syria/Iran. It’s a temporary measure for sure but obviously they felt it necessary,
> Bankrupt the fracking companies in America So are they fighting a war with North Dakota? Overall this is good for the US and the frackers equipment is still there, if price goes up they will come back, as they have done before. > Russia of money so they can’t effectuate greater sphere of influence in the Middle East through Syria/Iran Why are you referencing Iran? Iran and Russia while not enemies are hardly friend…
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The liquidity crunch in the global market can be used to negotiate a better deal for Saudi Arabia. Still, it's hard to know how good it will be without knowing more details.
> Still, it's hard to know how good it will be without knowing more details. Yeah, for all we know they could have loaded up on CDS on O&G plays and stand to offset any losses just by triggering default clauses on the frackers.