You can file Saudi Vision 2030 in the same folder as the Softbank Vision Fund
I.e. stupidity propped up by a strong market/global economy
IBS is a smooth talking tyrant
Ever the shrewd investor, I filled up both cars yesterday. Jeep didn’t need it, RDX did, but yikes. Bought at the top of the market. Oh well no real big deal. Both take about $40 of fuel, Jeep tank bigger but RDX gets premium. Think it was ~$2.30 for 87 and ~2.90 for premium.
Not quite sure if the Saudis just want to pressure the Russians for not playing along, or see this as an attempt to hit both Russia and US shale producers at the same time while using Russia as an excuse to avoid US hostility. That said, it seems shale producers are quite flexible in terms of starting and stopping production, so presumably they could weather this or suspend and re-start as they have done in the past?
Not the latest but this is about what each county needs to balance their budgets.
Then compare to the price oil in the last 10 years (oil is the red line)
Sure looks to me like they were losing money in 2014 when oil dropped from $90 to $50/bbl. We can only speculate how bad the SA bleeding will be at $20/bbl. Yes, they have boatloads of money in their sovereign wealth fund, but it's not unlimited, especially with as bad as the burn rate will be at $20-30 and the degree of population growth they've had.
Honestly: they've done nothing but lose money after 2014's oil price drop. It's foolish to think that they can outlast the rest of the world at losing money on oil when their own country is the one that is most closely tied to the price of oil. I maintain my stance however that if they want to wreck their own country, then let them. Once the deficits are large enough for long enough, they'll end up having to pull money from the PIF faster than it's growing naturally. If/when the world then moves to alternative energies quickly enough, demand for oil will fall and SA could be in a position of not only never getting the price high again but also never being able to ship 10+ million bbd again due to weak demand.
Last edited by AZGolf; 03-10-2020 at 02:29 PM.
Oil, oil for everyone:
The Kingdom's first move was to drastically
Increase production starting April I by 2.6 million
barrels a day, to a record 12.3 million barrels. The
next day, state oil giant Saudi Aramco announce
It would slash prices to preferred customers.
With crude prices plummeting, the Saudi energy
minister then instructed Aramco to accelerate
plans to increase capacity to 13 million barrels a
day by the end of the year. The United Arab
Emirates, a regional ally, then weighed in, with the
Abu Dhabi National Oil Company pledging to add
I million barrels a day to the market in April and
step up plans to expand its production capacity
to 5 million barrels per day.
It's clear with a bit of hindsight that the Kingdom
and other regional hea eights wanted to send
two key messages to the world. The first was that
Saudi Arabia remains willing to flex its muscle
and remind everyone what it feels like without the
kingdom serving as a global energy shock
absorber to an oversupplied market.
Message number two: if the energy world was
truly left to free market forces, the producers of
the Gulf will be the last ones standing. It costs
them less than anyone else to extract crude and
they can do it much more cheaply than shale
producers in the United States.
Saudi Arabia's state-run shipping company has
hired multiple very large crude carriers to carry
all the extra oil it plans on exporting next month
a rare move indeed for the shipping company
that sports its own fleet of 41 tankers, according
to Bloomberg sources.
Bahri, as the Saudi's shipping company is known,
has booked passage for its crude oil on three
VLCCs, each with the capacity to hau12 million
barrels of crude.
Next month, Saudi Arabia has plans to increase
shipments of crude to its prized market, Asia,
who will be more than happy to take on more oil
at the substantial discount that the Saudis are
selling their oil for as part of its oil war strategy.
However, trips from to the US take 40 days, and
Bahir's own tankers would not return to Saudi
Arabia in time to load these extra volumes.
In general, capital and returns are gravitating to businesses that are basically the opposite of oil- low capital investment/risk/operating cost. Basically, tech companies
But you prob won't do better than someone who just plunks their money into the market on a regular basis and never tries to beat it.
$1.69 at Costco here. Probably can't get into the parking lot as everyone is fighting over TP and bleach.
2019 Tiguan SE 4Mo Orange, temporarily stock. 2001 Passat 4Mo wagon, 1.8T/6sp swapped, Konis, coilover sleeves, A6Q H+R Race springs.
2005 Golf GLS, 2.Slow, Auto, GTI suspension, sways.
2001.5 Passat GLX V6, stock. (son#1), 2000 Passat GLS V6 fwd Tip wagon, stock (son#2)
Well well well, would you look at that. Just as oil prices plummet Iranian-backed militia groups start attacking bases where Americans are housed. Color me shocked that Iran is doing this because, with sanctions, coronavirus and ultra-low oil prices, Iran's economy is heading for a tailspin. Now, they want some action to scare the world into bringing the prices back up because they think Trump will go medieval on the militias (not sure why the militias would agree to something so suicial...). Let's see if it works.