Oil Saudi Arabia

SHALE OIL BONANZA KILLING SOWDI OIL REVENUES, HAVE FAR MORE TO LOSE THAN THE U.S……..

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LAUGHINGAB

Saudi Arabia may go broke before the US oil industry buckles

It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise

King Salman bin Abdulaziz Al Saud launching five projects within the Third Saudi expansion for the Grand Mosque in Makkah, July 12, 2015

King Salman bin Abdulaziz Al Saud  Photo: AFP/Getty

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.

More here.

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