Posted on 08/05/2015 4:28:08 PM PDT by Bubba_Leroy
It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise.
If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.
The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.
The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.
Bank of America says OPEC is now "effectively dissolved". The cartel might as well shut down its offices in Vienna to save money.
If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short-run," said the Saudi central bank in its latest stability report.
(Excerpt) Read more at telegraph.co.uk ...
What a shame.
Is there a downside to OPEC going down the tubes?
How many tera-bucks have the Saudis got in the bank?
How many GOP and demis they own like Grover? Don’t forget, they paid for Obama to go to school at Harvard.
Another reason I like Trump. Probably be hard to bribe him.
Only the swiss bankers know.
Different take on this: So Saudi Arabia needs to move quickly on acquiring nuclear weapons and delivery systems and arrange a joint attack with Israel to eliminate Iran. This forecast and Obama’s overt financing and assistance to Iran mean that SA will get steadily weaker and Iran steadily stronger. SA and Israel need to attack ASAP.
Isn’t capitalism wonderful!
Maybe SA will stop funding terrorism.
Since Obama is letting Iran have nukes there is a strong likelihood of nuclear war.
good analysis ... how about 183 days from now ?
A pox on all their houses. The only downside: more refugees coming to Europe and America. Which we will stupidly let in.
Bank of America says OPEC is now “effectively dissolved”. The cartel might as well shut down its offices in Vienna to save money.
...
Anyone who lived through the gas lines of the 1970’s probably thought they would never read that.
This could give us hope that one day, the Washington cartel will be dissolved, too.
Strong likelihood? I would say, it is more like an ironclad guarantee of nuclear war, or at the very least, a severe nuclear arms race.
They are using their reserves to diversify as quickly as they can, even getting into solar. I don't think they will succeed, and the world will be better off for it.
And the price of oil is not their biggest problem. A nuclear armed Iran is their biggest problem.
Not at all from what I've read. If true, they can keep this up for a few years.
OTOH, once we get rid of obozo American industry will have considerably better options to handle such events and be much more flexible.
Until then, it's cap, cut back or close and consolidate.
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