Saudi Arabia may go broke before the US oil industry buckles

Saudi Arabia may go broke before the US oil industry buckles

If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.

The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.

The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.


http://www.telegraph.co.uk/business/2016/02/11/saudi-arabia-may-go-broke-before-the-us-oil-industry-buckles/
Bank of America says OPEC is now "effectively dissolved". The cartel might as well shut down its offices in Vienna to save money.

Spending slashed as Qatar prepares to run QR46.5 billion deficit

http://dohanews.co/spending-slashed-qatar-prepares-run-qr46-5-billion-deficit/

Saudi Arabia has a bleak future ahead, remember this report?

http://www.cnn.com/2015/10/27/world/persian-gulf-heat-climate-change/

Many of those gulf states have been in deep doo doo for the past 30-40 years,   basically for one good reason --  most of their national resources are tied up one single product ==  crude oil...

Many of their major competitors - such as the USA, Malaysia, Russia, Brazi, Mexico, Indonesia, and the likes -  have more widely diversified economies;  so that in these cyclical price downturns while these countries head towards a recession, those OPEC members are often racing headlong into a depression..

The Saudiz have not been forward looking in other things apart from crude.

I would like to see them in the sh**.

Their wealth has protected them so far.

Electric carz will improve so more people buy them, not that I fancy one yet.
Oil producerz will inevitably suffer downfall in profitz.

I think it might have been KIng Fahd who a few years ago said (my paraphrasing..), in relation to the OPEC states :

"Our fathers rode camels, we drive Mercedes, our sons fly jets.
Eventually our grandchildren will again ride camels."

A report on Sky News said, the batteries only last for about 5 years then new ones have to be installed. At a cost of £5000 or more there will a lot of dumped cars.

WhoseYourWolfie wrote:I think it might have been KIng Fahd who a few years ago said (my paraphrasing..), in relation to the OPEC states :

"Our fathers rode camels, we drive Mercedes, our sons fly jets.
Eventually our grandchildren will again ride camels."

Goodun

nicko wrote:A report on Sky News said,   the batteries only last for about 5 years then new ones have to be installed.  At a cost of £5000 or more there will a lot of dumped cars.

I'VE read that one of the reasons that the whole battery pack is replaced so early, is that the car manufacturers have set around 80% of it's original capacity as the time for replacement.

DOWN here, the estimated cost for replacement batteries is around $10-15,000AUD -- or around 10-25% of the vehicles replacement costs (the cheapest fully electric car here is around $50k, while the most expensive is the Tesla sports coupe, at $200k).

OBVIOUSLY these costs need to be factored in the over-full-life running costs for these vehicles..

BECAUSE those used battery packs (actually a bank of several dozen batteries conected together in a cage..) are still in good condition, there is already a secondary market developing for them; where some enterprising companies are using them for backup systems for solar power arrays,  and in rural, remote area and industrial situations...