August 17, 2015

SURELY WE'RE ALL SURPRISED THE ARABS DON'T UNDERSTAND ECONOMICS...:

Oil war could backfire on Saudi Arabia as price plummets (Ravender Sembhy, August 17, 2015, IB Times)

Saudi Arabia's attempt to crush the US shale industry is backfiring. Brent crude is trading at about $48.52 (£31) per barrel, compared with $107 (£69, €98) in June 2014, largely due to massive overproduction by Riyadh, which is pumping out 10.6 million barrels per day.

The Gulf state's response to the rise of shale oil and gas fracking in the US - which threatens to reduce global reliance on Saudi oil - has been to ramp up production, deflate prices and hope to drive American shale producers out of business.

The US shale industry has not only held up by utilising technological efficiencies and cutting costs but is churning out 9.6 million barrels per day, a 43-year high. Saudi Arabia's central bank even acknowledged recently: "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought." The repercussions are now having a detrimental effect on the Saudi economy.

Posted by at August 17, 2015 2:01 PM
  

blog comments powered by Disqus
« WE'RE THE ONES WITH SOMETHING TO CONSERVE: | Main | WE'LL REFORM IT, NOT REPEAL IT: »