To: Glenn Petersen who wrote (197579 ) 3/9/2017 11:01:26 AM From: elmatador 1 RecommendationRecommended By
Read Replies (1) | Respond to Reemergence of American Shale Oil Boom Destroying Saudi Arabiadeclared that the profitable doubling of U.S. oil drilling over the last 9 months means the reemerging U.S. shale boom is a potent threat to Saudi Arabia — despite the Saudis declaring a price war in 2014. According to the Fitch report released on March 7, “The recovery in US drilling activity will drive up shale oil production in the second half of 2017, offsetting a portion of recent oil price gains.” The rating agency’s comment follows an effort by Saudi Arabia that began in October 2014 to drive the price of oil down from over $100 a barrel in an effort to kill the U.S. shale boom.U.S. crude oil drilling rig count that fell last year to 316 for the week ending on May 27, the lowest level since the 1940s, but has since jumped 93 percent to 609 on March 3. Fitch said that due to booming U.S. production, “We therefore expect average oil prices for the year to be below those in January and February.”reported that Saudi Arabia was a prime beneficiary from the 1998 to 2014 commodity “ supercycle ” that saw the oil price rise by 1,062 percent to a high of $116 a barrel. The resulting tsunami of cash flow allowed the nation of 31 million, where only 5.5 million have jobs, to accumulate $737 billion in foreign exchange reserves, while fully subsidizing a Western upper-middle-class lifestyle for the population.doubled U.S. crude oil production to 9.3 million barrels a day.According to George Friedman of Geopolitical Futures, the price war cost Saudi Arabia at least $198 billion though January 2017, and created a worldwide surplus that drove the price oil down to an 18-year low of $23 a barrel in January 2016. Even after modest production cutbacks since then, the price only partially recovered, to about $53.18 a barrel .9.1 million barrel a day. The Absent Superpower , reveals that a combination of 40 percent cost-cutting, plus technological advances that quadrupled the amount of oil recovered from each well drilled, have together slashed the breakeven cost in the four largest “shale fracking plays” to about $40 a barrel. He predicts that the breakeven could drop to $25 a barrel by 2019, making U.S. shale producers the lowest cost oil producers on the planet.King Salman Bin Abdulaziz announced that the Saudi Aramco state-owned oil monopoly will go public in 2018.harsh economic realities of negative cash flow hammering Saudi Arabia’s solvency, King Salman has been forced to go, keffiyeh in hand (along with a 1,500-strong entourage and 908,000 lbs. of luggage), on a six-nation Asian tour that includes stops in Malaysia, Brunei, Maldives, Indonesia, China, and Japan to try drum up demand for the price of Saudi Aramco shares.
