This is why the Saudi's can continue to pump at current levels. Their infrastructure has long been paid for, everything that comes out of their wells now (sans labor costs) is pure profit. They know they can pump at current levels for a very long time without feeling too much pain.
As opposed to the American fracking boom which has high start-up infrastructure costs that relies on higher costs per barrel to recover the high start-up infrastructure costs quickly.
The only way we win this pricing game against the Saudi's is via continued innovation in fracking and horizontal drilling to continue to drive OUR extraction costs per barrel down.
So the choice here is to place your money on the Saudi's, or place your money on American ingenuity and innovation to drive our own extraction costs down while increasing production to maintain profitability and pay off our own infrastructure quickly.
My money's on America. Never bet against good old fashioned American innovation and ingenuity. We STILL are the best in the world in that game.
Another way to win this pricing game is to continue developing our wind and solar infrastructure. T. Boone Pickens, famed oil man, has invested in a lot of west Texas strong wind country, and I understand pushed the state legislature to develop grid capacity to hook developed wind power to it.
Meanwhile, remember that Saudi Arabia and Qatar are very hostile to Iran and Syria which are friendly to competitor Russia. These lower prices are hurting both Iran and Russia which makes SA very happy.