Saudi Arabia just won control of the oil market

[XTQ1999]

Lol whole us economy is dependent on oil. Dollar hold it value cause it can trade against oil.

Currently USA is the biggest producer of oil but at low price USA has to import oil and thus pump money into Saudia real money. At low more than half of US oil is not economical to pump and thus USA production drops. This means reduced tax revenue from domestic production of oil and out flow of funds to purchase oil. This bring Russia out of sanctions as USA has to make purchase oil from there. On top of all recession from coronavirus. Russia and Saudis will sustain due to high oil production although cheap price. China is a consumer of oil majorly so Chinese revenue is not oil based so China India Pakistan will be big gainers from this.

Lol what are you talking about?

First the effect of use of dollar by most oil producing countries does not alone contribute to the power of the dollar, its overall the global usage of it, you can check how much USD is used just on daily basis and compare that to oil exports, and you will see how small of a % oil makes up.

US has to import oil even despite being the biggest producer, and in short term most companies will not reduce their production, meaning US production will not suddenly collapse. Operating at a loss is nothing new in United States, some of biggest companies in US and the world constantly operate at a loss. These short term fluctuations will not cause a collapse in US production. Tax revenue from oil production is also not much in overall scale of US economy.

Effects of coronavirus is not limited to US, Saudi Arabia will not see any tourists this season due to it, which means billions of dollars lost already just from that, then you add the effect of low oil prices, and things are not looking too good.

Russia may be able to sustain production at such low price because they are used to hardship, they don't have princes in Europe driving expensive cars, or purchasing expensive items around the globe. Saudis cannot sustain such price, last time they tried, they lost 100s of billions from FOREX reserves and had to arrest many royal family members to squeeze money out of them. Things haven't really changed, today Saudis just have smaller FOREX reserve than 2014 crisis.

 

[Trango Towers]

LOL ! It is consumers that won ! Now Oil is as cheap as water. It is the West and Industrial economies that have won. Most countries will win as global recession is upon us and low oil prices will help in recovery.

Are you seeing that at the petrol station....NO
Will you see that...NO

 

[OldTwilight]

The title is as ridicules as a whore claiming to win the market by offering herself for free ...

 

[Morpheus]

KSA shoot itself in the foot with this policy. Despite all reforms, they still need oil money to keep their economy going. For that they need the oil to be $78/barrel. Bring it down to $29/barrels, means they need to find money elsewhere. They could have used the tourist, and ummrah money, but the virus took care of that.

The winner are the consumers. Cheap oil. Loser are KSA and its citizen who would not be able to get any service now because government doesn't have money. So it will come down to who can hold the production longest before cracking, and pushing the price up.

 

[Sine Nomine]

KSA shoot itself in the foot with this policy. Despite all reforms, they still need oil money to keep their economy going. For that they need the oil to be $78/barrel. Bring it down to $29/barrels, means they need to find money elsewhere. They could have used the tourist, and ummrah money, but the virus took care of that.

The winner are the consumers. Cheap oil. Loser are KSA and its citizen who would not be able to get any service now because government doesn't have money. So it will come down to who can hold the production longest before cracking, and pushing the price up.

Bottom line is that,they do have reserve cash for taking care of this but this would break back of some states,sending them into chaos and it may lead them into abyss.

The title is as ridicules as a whore claiming to win the market by offering herself for free ...

Well by that logic, this whore by offering herself almost free is going to destroy other whores in market.

 

[BHarwana]

Lol what are you talking about?

First the effect of use of dollar by most oil producing countries does not alone contribute to the power of the dollar, its overall the global usage of it, you can check how much USD is used just on daily basis and compare that to oil exports, and you will see how small of a % oil makes up.

US has to import oil even despite being the biggest producer, and in short term most companies will not reduce their production, meaning US production will not suddenly collapse. Operating at a loss is nothing new in United States, some of biggest companies in US and the world constantly operate at a loss. These short term fluctuations will not cause a collapse in US production. Tax revenue from oil production is also not much in overall scale of US economy.

Effects of coronavirus is not limited to US, Saudi Arabia will not see any tourists this season due to it, which means billions of dollars lost already just from that, then you add the effect of low oil prices, and things are not looking too good.

Russia may be able to sustain production at such low price because they are used to hardship, they don't have princes in Europe driving expensive cars, or purchasing expensive items around the globe. Saudis cannot sustain such price, last time they tried, they lost 100s of billions from FOREX reserves and had to arrest many royal family members to squeeze money out of them. Things haven't really changed, today Saudis just have smaller FOREX reserve than 2014 crisis.

The dollar is used for trading oil is the very reason dollar is used to trade for other commodities. Dollar value against oil is what makes it reserve currency.

Yes USA imports oil despite being the biggest producer and at this price where oil is standing today USA has to import 60% of its oil demand. Which is not good for USA. Those US companies cannot sustain even in short term. A continuous 2 weeks of these prices will bankrupt many companies.

Both Russia and Saudis cannot sustain such prices.
These low prices will come with budget cut but in times when demand is falling and recession is kicking in then budget cuts were anyway going to happen and low prices with increased demand are a help.

 

[OldTwilight]

Well by that logic, this whore by offering herself almost free is going to destroy other whores in market.

the problem is the consumer will destroy her in process ... and soon she will lose even her health ...

 

[Mentee]

Guys just me give a rough date when are the Saudis /gcc gonna seen drifting a Suzuki Mehran?

 

[raptor22]

As far as I know cost of oil production per barrel which indeed differs from one producer to producer should be considered too .. for Iran it is 9$ pb and for Saudis around 8.9$ pb that means if oil prices has got to 20$ pb Saudis and Iranians would earn almost 10$ pb .. which doesn't make sense ... we sell 250 k per day so it would not be a problem for us but selling 13 million barrel oil by this price is ........ .

Iran has adopted a good strategy and has decided to not sell crude oil but mostly petrochemical and so on .. I hope we stop total oil crude export and use it in a better way ... like:

Built by Iranians under sanctions

 

[OldTwilight]

As far as I know cost of oil production per barrel which indeed differs from one producer to producer should be considered too .. for Iran it is 9$ pb and for Saudis around 8.9$ pb that means if oil prices has got to 20$ pb Saudis and Iranians would earn almost 10$ pb .. which doesn't make sense ... we sell 250 k per day so it would not be a problem for us but selling 13 million barrel oil by this price is ........ .

View attachment 615853

Iran has adopted a good strategy and has decided to not sell crude oil but mostly petrochemical and so on .. I hope we stop total oil crude export and use it in a better way ... like:

Built by Iranians under sanctions

USA wants to sanction petrochemical too and now thanks to coronavirus , the demand for petrochemical good is rapidly falling ...

Maybe we should just extend our look at inside ....

بهتره روی کشاورزی ، راه سازی و مسکن بیشتر سرمایه گذاری کنیم ...

 

[Sine Nomine]

the problem is the consumer will destroy her in process ... and soon she will lose even her health ...

Don't worry they can sustain it,i am sure they are not fools when it comes to money.

 

[OldTwilight]

Don't worry they can sustain it,i am sure they are not fools when it comes to money.

Nope , sometimes they overestimate their capabilities ...

 

[Sine Nomine]

Nope , sometimes they overestimate their capabilities ...

Habibs have huge pockets.

 

[Timur]

I didnt expect that we could see 99 cents for diesel again.. haha

 

[BATMAN]

Although Saudis can take price much lower than what Russia can do. But to be profitable and maintain current budget the last price for Saudis is $50 and Russia is $30

If Saudis push it lower we can see budget cuts both in Russia and China. The biggest loser here will be USA. So I think both Russia and Saudis are actually teaching trump a lesson.

you and your conspiracy theories.
Oil market or any commodity market is heavily manipulated by investors besides supply and demand basics.
There are experts of commodity markets writing predictive articles... but all proven wrong each and every time.
Now here you are, aligning Russia and Saudis together against US, as if aligning Israel and Saudis and US and Saudis against Iran was not enough.