the bottom line is that saudi makes more money at $60 than $100

at $100 everyone can produce profitably and Saudi's market share goes down quickly. besides saudi has to cut production in order to keep rice artificially high, while other OPEC members cheat and non-OPEC members are not obligated to do so.

at $60 many high-cost producers will shut down over time and new exploration and drilling will stall. saudi's market share will go up and saudi will make more revenues overall. yes $90 is the budget break-even point for Saudi. however that is a static view keeping output level constant.

i feel the saudi is determined to teach high cost producers a lesson. they will not stop until there is a chill down the spine and blood everywhere. they are willing to burn their petrodollar reserve in the short term to deter new producers for a while.

russia provides just the right excuse and O8 is looking away.

just my 2c

所有跟帖： 

• Thank you for your thoughts. Could you elaborate more on your la -redis- ♂ (209 bytes) () 01/25/2015 postreply 13:07:43

• initially folks think the US and Saudi colluded to ... -njrookie- ♂ (636 bytes) () 01/25/2015 postreply 14:42:18

• Thank you for the answer -redis- ♂ (0 bytes) () 01/25/2015 postreply 15:23:02

• 我对谁是受害者的想法很不同。石油价格没有美国参与怎么搞？ -sweetptt- ♂ (0 bytes) () 01/25/2015 postreply 17:38:50

• it is all in the cost -njrookie- ♂ (184 bytes) () 01/25/2015 postreply 18:31:58

• If US lift the ban for oil exporting, will that affect the marke -3bunny- ♀ (0 bytes) () 01/25/2015 postreply 15:07:56

• $90 is the budget break-even point for Saudi. however that is a -Smilee- ♀ (212 bytes) () 01/25/2015 postreply 16:07:58

• Prof. Could you elaborate? -Smilee- ♀ (0 bytes) () 01/25/2015 postreply 16:11:31

• at the current output level, Saudi fiscal spending ... -njrookie- ♂ (1394 bytes) () 01/25/2015 postreply 18:37:36

• Thanks a lot! -Smilee- ♀ (0 bytes) () 01/25/2015 postreply 18:41:42

• The worst thing is, if the crude oil price is not controlled by -edison11- ♂ (0 bytes) () 01/25/2015 postreply 16:56:54

• 沙特也可以一边空石油期货，一边在低油价的时候增产。对他们来说，亏不了多少 -牛二买刀- ♂ (0 bytes) () 01/27/2015 postreply 15:47:35