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Started by BargeMonkey, December 25, 2015, 08:58:36 PM

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grassfed

QuoteThe Saudis can't keep this up forever.
The thing to remember is that the Saudis are the low cost producer by a large margin. If their cost of producing one more barrel of oil is $10 then their competitors cost is $40. At $36 they are making money on each barrel produced and oil sands and shale oil are losing money. If the Saudis cut the price and demand responds they can cover their budget by selling more. If a well is losing money the working interest owners have to cut a check every month to cover cost of production. After a while they cap the well and it is not that easy to reopen a well; the equipment deteriorates. 
Mike

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