Who Is Saudi Arabia Really Targeting In Its Price War?

Follow-up on the previous article, this one from Arthur Berman for Naked Capitalism :

Prolonged low oil prices will prove that tight oil plays need at least $75 per barrel to break even. When oil prices recover to that level, only the best parts of the tight oil core areas will be competitive in the global market. As production declines from expensive tight oil, oil sand and ultra-deep-water plays, inexpensive Saudi oil will gain market share.

Saudi Arabia is not trying to crush tight oil plays, just the stupid money that funded the over-production of tight oil. Too much supply combined with weak demand created the present oil-price collapse. Saudi Arabia hopes to prolong low prices to benefit their long-term needs for market share and higher demand.

→ Naked Capitalism

Why Oil Prices Came Down, And Won’t Anymore

Historically, Saudi Arabia has played a stabilizing role in world oil prices, by adjusting its output to ensure global supply is stable. The above graph show how Saudi output increased to lower prices when they were high, and vice versa. However, since July, the Saudis have not responded to newly low oil prices by decreasing output. In fact, the Kingdom have insisted that they would rather bear lower oil prices than decrease their market share (read: be squeezed out by shale).

→ Stats Life

The World’s Worst War

Its soil is so productive that a trip through the countryside, past all the banana, orange, papaya, guava and mango trees virtually scraping the windshield, is like driving through a fruit salad. But without any functioning infrastructure, all this agricultural potential is moot.

→ The New York Times

Green Illusions: The Limits of Alternative Energy

Carbon isn’t the whole story. When you count toxic sludge from making solar panels, noise from windmills placed too close to residential areas, or changes in land use patterns from cultivating biofuel crops, you find that alternative energy has negative externalities of its own that offset its low-carbon benefits at least in part, and sometimes entirely.

→ EconoMonitor