Saudi cut production volumes in order to stabilize and/or increase prices those first 4 times because the US still had to buy over 50% of its oil from them. Now the US can produce enough oil to not be dependent on the Middle East. That is if the price can climb to $50-$70/bbl in order to make a profit. Therefore this time Saudi will keep the price low forcing the US oil industry to disintegrate to nothing. When all the companies have gone bankrupt the US will be totally dependent on the Middle East for oil to run our everyday lives. Guess what the price will be then? Saudi only has $680 billion in their reserves. More than enough to outlast any US oil producer.

It's just a matter of time.

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Posted by Lou Pai

Member since Dec 2014

29643 posts

Posted on 4/27/16 at 9:58 pm to 9Fiddy

Well, they aren't going to win that battle. Cost curve has been redefined permanently, and there is a tremendous amount of intellectual capital in US E&P companies. There are plenty of producers with stalwart balance sheets for the long haul, and service costs continue to fall.

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Posted by RogerTheShrubber

Juneau, AK

Member since Jan 2009

299716 posts

Posted on 4/27/16 at 10:02 pm to upgrayedd

I think Pickens has a lot tied up in wind energy. Wouldn't trust him on this

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Posted by Peazey

Metry

Member since Apr 2012

25427 posts

Posted on 4/27/16 at 10:24 pm to Lou Pai

quote:
But maybe you know something Yellen and the FOMC doesn't, genius.

They certainly know something that you don't, jackass.

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Posted by CorporateTiger

Member since Aug 2014

10700 posts

Posted on 4/27/16 at 10:41 pm to 9Fiddy

quote:
Saudi only has $680 billion in their reserves.

Good luck getting any kind of reliable balance sheet out of Aramco. They aren't planning a partial IPO because they are financially hearty and hale.

The gold lambo's for the extended royal family ain't gonna pay themselves iffin you know what I mean.

There are producers that can last for quite a while in this climate. Maybe not quite indefinitely, but plenty enough time to let Saudi feel a crunch.

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Posted by Lou Pai

Member since Dec 2014

29643 posts

Posted on 4/27/16 at 10:42 pm to Peazey

Of course they do. They are well trained and have their finger of the pulse of the economy in all of its facets. So when Yellen says something like "sub-$30 oil would tend to restrain U.S. economic activity" last month, and this corroborates a suspicion I have held throughout the duration of the downturn thus far... that extremely low oil prices may actually be a problem for the economy as a whole (or at least not the boon people may think), I listen to what they say.

Since you pulled this earlier on another poster though, let me guess... Bernie supporter?

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Posted by RockyMtnTigerWDE

War Damn Eagle Dad!

Member since Oct 2010

109165 posts

Posted on 4/27/16 at 11:03 pm to N2cars

quote:
I want to keep going faster and farther while pulling my bay boat or car trailer in cool, air-conditioned comfort. At the end of my 450 mi. range, I want to stop for 10 minutes and be on my way.

Lemme know when them fancy 'lectric vee-hickles can do such.

Until then I will rely on good old LSU PETE's to take care of bidness.

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Posted by Volvagia

Fort Worth

Member since Mar 2006

53599 posts

Posted on 4/28/16 at 12:01 am to The First Cut

quote:
Sure it is, what does that have to do with it?

The whole crying about domestic vs foreign oil is the biggest load of crap in the current climate.

It's just oil. Supply and demand names a price, and some reserves aren't profitable at that price. I think you would be surprised how much oil drilled in US territories by US companies didn't actually stay in the US.

If anything, it's better this way.

I'd rather the Mid East burn through their reserves faster than we do ours.

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Posted by tiggerthetooth