Oil plunges: Another $1B in UA savings
03-09-2020, 11:54 AM
#11
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Andy beat me to this. Saudis have lowest cost production by far. On that front they can sustain. But they are a bit more oil dependent as well.
One quick way to look at who the market thinks will blink first are currency's - Ruble down to a 4 year low already. Saudi's peg their currency - if this went on a long time if there was ever a real run on their currency it would be a crazy ride if they couldn't defend the peg. No winners in the end.
One quick way to look at who the market thinks will blink first are currency's - Ruble down to a 4 year low already. Saudi's peg their currency - if this went on a long time if there was ever a real run on their currency it would be a crazy ride if they couldn't defend the peg. No winners in the end.
03-09-2020, 11:59 AM
#12
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While the Saudis clearly have a cost advantage, they also have a huge social cost of their “cradle to grave “ social welfare system funded almost exclusively by oil revenues. When oil goes too far down they have a massive cash burn to subsidize their programs. It will be interesting to see who blinks first. I am not so sure it will be the Russians
03-09-2020, 12:41 PM
#13
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While the Saudis clearly have a cost advantage, they also have a huge social cost of their “cradle to grave “ social welfare system funded almost exclusively by oil revenues. When oil goes too far down they have a massive cash burn to subsidize their programs. It will be interesting to see who blinks first. I am not so sure it will be the Russians
These large oil price movements are bad for the global economy.
03-09-2020, 01:49 PM
#14
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While the Saudis clearly have a cost advantage, they also have a huge social cost of their “cradle to grave “ social welfare system funded almost exclusively by oil revenues. When oil goes too far down they have a massive cash burn to subsidize their programs. It will be interesting to see who blinks first. I am not so sure it will be the Russians
03-09-2020, 02:09 PM
#15
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03-09-2020, 04:18 PM
#16
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Saudi needs 84 a barrel to balance the budget, Russia needs 45 a barrel. All good if you can produce profitability but if the government is burning through cash like an incinerator than that’s the problem. Biggest loser is shale, will collapse if these prices are sustained.
03-09-2020, 06:30 PM
#17
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Interesting article on what triggered the breakdown in OPEC+. https://www.msn.com/en-us/money/mark...cid=spartanntp
I've seen analyst/expert calls for oil to fall to $20. Let's hope the remaining decline is a bit slower than the last week.
I've seen analyst/expert calls for oil to fall to $20. Let's hope the remaining decline is a bit slower than the last week.
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