Bad news for the Saudis and Russians

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Netpackrat
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Re: Bad news for the Saudis and Russians

Post by Netpackrat »

slowpoke wrote:Waiting for the US government and Russian government to realise its in both their financial interests to destroy the Saudi oil fields. Wont that be a kick. :?:
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PawPaw
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Re: Bad news for the Saudis and Russians

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The only downside to cheap oil is that it does put some producers out of pumping the less efficient fields. My sister-in-law was working for one such company in a small field in central Louisiana. When the price got down below the break even, they turned the pumps off and sent everybody home. So, cheap oil does hurt some folks.
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Netpackrat
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Re: Bad news for the Saudis and Russians

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It's killing us up here.
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Vonz90
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Re: Bad news for the Saudis and Russians

Post by Vonz90 »

Netpackrat wrote:It's killing us up here.
Understand, the Saudis are trying to pump hard to keep the price low so the marginal producers drop out and they can drop production later and get it back over $100 a barrel (or at least higher than it was before). Then they can use the threat of doing it again to keep a lot of oil off of the market.

As long as that does not happen, then they will eventually be forced to dial it back and let the market figure things out. That is the best outcome.
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Netpackrat
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Re: Bad news for the Saudis and Russians

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Vonz90 wrote:
Netpackrat wrote:It's killing us up here.
Understand, the Saudis are trying to pump hard to keep the price low so the marginal producers drop out and they can drop production later and get it back over $100 a barrel (or at least higher than it was before). Then they can use the threat of doing it again to keep a lot of oil off of the market.

As long as that does not happen, then they will eventually be forced to dial it back and let the market figure things out. That is the best outcome.
Yeah, I get that. But until the correction happens, nobody who works in the oil business in Alaska is safe from the threat of layoff, simply because it's inherently more expensive to operate up here. Plus we are probably looking at having a state income tax again in the not too distant future, and once that happens, even if the price of oil recovers we'll probably never be able to get rid of it.
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HTRN
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Re: Bad news for the Saudis and Russians

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PawPaw wrote:I read the link. I didn't know that Saudi needed $100 bbl oil to prop up their welfare state and military.
I've stated here a coupla times, the Saudis have extremely low extraction costs(under 20 a barrel), but need high prices to maintain their welfare state. This is not new. Its been going on since the house of said solidified power to keep the tribes in line. They were the instigators of the recent price war, hoping to break the backs of the Russian oil ogliarchy(which also needs high prices, as mineral extraction is one of the few things bringing in money these days for them, they just don't need it as bad as the Arabs do) and the big threat, the Canadian tar sand fields. Unfortunately, the Russians have their government behind them, the tar sands extractín costs.have dropped enough that this isn't viable, and to top it all off there's a massive oil glut on the market right now, and delivery day has come due.
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Langenator
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Re: Bad news for the Saudis and Russians

Post by Langenator »

Low oil prices also hurts the Saudis' other big enemy - Iran. Their break even point is somewhere ~$120/bbl. Probably why they needed that ransom money so badly.

http://marketrealist.com/2016/01/fiscal ... economies/
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slowpoke
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Re: Bad news for the Saudis and Russians

Post by slowpoke »

Langenator wrote:Low oil prices also hurts the Saudis' other big enemy - Iran. Their break even point is somewhere ~$120/bbl. Probably why they needed that ransom money so badly.

http://marketrealist.com/2016/01/fiscal ... economies/
If we work it right the Russian part of the AmeroRus strike will likely take the iranian regime out to clear thier flight path.

You know its like nobody in our government even knows what The Great Game is. No wonder Putin's been so frustrated at Obama...
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MiddleAgedKen
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Re: Bad news for the Saudis and Russians

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slowpoke wrote:You know its like nobody in our government even knows what The Great Game is. No wonder Putin's been so frustrated at Obama...
Well, it happened BC (Before Cobain), and all the information about it has all these words and stuff, and no one really knows what it means.... </ezraklein>
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Windy Wilson
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Re: Bad news for the Saudis and Russians

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slowpoke wrote:You know its like nobody in our government even knows what The Great Game is. No wonder Putin's been so frustrated at Obama...
This administration has run things like High School Student Government for two terms. What does a High School student council know about real politik?
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"I support the Second Amendment, but". . .
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