With a foreign reserve of over $700bn a year ago, Saudi reserves have dropped to $65bn forcing the kingdom to issue bonds for the first time ever to raise a paltry $27bn. To make matters worse Saudi in the midst of trying to force Shale production down by flooding the market with cheap oil still maintains the most paternalistic social services and to boot is funding an expensive sectarian war in Yemen with them not making any progress what so ever.

The Saudis have to be the dumbest dumb phucks since creation.

bet why

DaBullIT:
bet why

In just one year the Saudis have reduced their reserves from $700bn to less than 10%

It seems they have too many Goodluck Jonathan in their government

it is because of people like you America legalised the use of guns.. So you will be shot down when you post things like this

bloody mofo

BishopMagic:
With a foreign reserve of over $700bn a year ago, Saudi reserves have dropped to $65bn forcing the kingdom to issue bonds for the first time ever to raise a paltry $27bn. To make matters worse Saudi in the midst of trying to force Shale production down by flooding the market with cheap oil still maintains the most paternalistic social services and to boot is funding an expensive sectarian war in Yemen with them not making any progress what so ever.

The Saudis have to be the dumbest dumb phuck since creation.

ZeezaRapture:
it is because of people like you America legalised the use of guns.. So you will be shot down when you post things like this

bloody mofo

Saudi slave.

Its not $67bn its $672bn

Even though I believe strongly that the US dollar will go the way of the Zimbabwean currency occasioned by the greatest collapse of the US stock market coupled with US govt debt hitting $18trillion and combined US debt at $95trn, it will make a lot of sense for the Saudis to dump the dollar but they are not diversifying but still spending as if oil is still $100.

So why in God's name will the American allied Saudis be spending without control?

yang:
Its not $67bn its $672bn

Did you see my chart above?

They have got a clueless one like....that man, they have also got a clueless economy manager, like that fellow that has big nose and always wears native, with her glasses.

cool

ZeezaRapture:
it is because of people like you America legalised the use of guns.. So you will be shot down when you post things like this

bloody mofo

I guess you're a Muslim
?

truth hurts though.

check out Dubai....the oil was just for 25yrs..look at wot the country made out of a desert!

Saudi is clueless!

it is even good, all those sponsoring terrorism go siddon

lies...it fell by 65billion dollars

tobtap:
lies...it fell by 65billion dollars

Fool look at the chart above.

Bishop, check your numbers it is $672B, nevertheless I agree with your stands on saudi arabia.

http://www.bloomberg.com/news/articles/2015-06-28/saudi-foreign-reserves-drop-for-fourth-month-to-672-billion

[size=18pt]Fracking is winning and Saudi Arabia loses[/size]
by Gwynne Dyer on August 19th, 2015 at 3:24 PM

“No one can set the price of oil. It’s up to Allah,” said Saudi Arabian Oil Minister Ali al-Naimi in May.

But less devout people believe that Saudi Arabia has been trying very hard to set the price of oil—and to set it low. Moreover, it has been remarkably successful, because last week the price of oil was in the mid $40s per barrel, down from just over $100 last May.

But Riyadh is not achieving its objective.


Saudi Arabia, like any oil producer, likes a high price for its oil, but since it is very rich and has huge reserves it thinks long-term. Watching American oil production almost double in the past seven years, mainly thanks to the rapid rise of fracking, the Saudis could see that they risked losing their role as the “swing producer” who can raise or lower the oil price just by cutting or increasing its own production.

The only way Saudi Arabia could keep that role was to drive the American frackers out of business. Production costs are secret in the oil world, but the Saudis assumed that the injection of water, sand, and chemicals into shale rock at high pressure makes hydraulic fracturing—fracking—very expensive.

So the Saudi strategy is to keep its own production high in order to push the the oil price down. If the price stays low enough for long enough, high-cost producers like the frackers will have to close down. Then, once the competition had been eliminated, Saudi Arabia jacks the price back up by cutting its own production, and the glory days return. 

In the meantime Saudi Arabia is losing income too, of course, and oil revenues account for 90 percent of the national budget. It can live on savings for a while, but it needs a fairly quick win. 

It would be politically unwise to cut the lavish government spending that keeps the Saudi population happy, and the government is also involved in an expensive war in Yemen. The missing income has mostly been replaced by withdrawals from the country’s huge foreign reserves, estimated a year ago at $700 billion—but those reserves have fallen by $65 billion in the past year. 

The Saudis don’t want to run those reserves down too far: without them, it could not afford to play the role of “swing producer”, and would lose most of its diplomatic clout. So last week, for the first time in eight years, Saudi Arabia started selling government bonds, planning to raise $27 billion by the end of the year.

The strain is starting to show. 

The strain of this attritional battle is also showing in the United States, where various shale oil producers have cancelled or postponed new drilling projects. But the shale producers have consolidated into bigger companies and increased the efficiency of their production processes, and U.S. oil production is actually continuing to grow this year. It is now at about 90 percent of Saudi production.

The brutal fact is that the Saudis are losing this battle. When the U.S. was the biggest producer of oil, before about 1970, it was the swing producer. Within a few years, it will have overtaken Saudi oil production and will be the swing producer again. And there is nothing Riyadh can do about it.

The Saudis made two mistakes. The first was to overestimate the cost of U.S. shale oil production, and assume that any price below about $80 per barrel would make it unprofitable. There are some shale oil plays for which this is true, but the costs vary wildly, according to the local geology, and can be as low as $20 per barrel. Most shale oil is profitable at $60 per barrel, and that proportion is rising rapidly as consolidation proceeds and efficiency rises. 

Their other, bigger mistake was to believe that victory was possible at all. When you stop production from a conventional oil well, there is a large permanent loss of flow when you restart production. The pores in the oil-bearing rock clog up, and that permanently reduces the “bottom-hole” pressure that forces the oil to the surface.

Stopping production at a shale-oil site incurs no such loss, since the producers create the pressure themselves. Uncap it, and the flow resumes as before.

So even if the Saudis succeeded in forcing most of the shale-oil sites to close, the shale producers would just turn the flow on again as soon as Saudi Arabia declared victory and cut production to get the price of oil back up.

It will take a little more time to the Saudis to acknowledge their mistake, and they may not even be able to get the price back up to where they need it by cutting production. American production will continue to rise, and Iranian oil will probably also be coming back on the market in a big way by next year.

The Saudis will stay rich, but they will have to cut their spending and they will suffer a permanent loss of influence.

Their only consolation will be that Iran, which they see as their greatest enemy, won’t be able to use its oil to buy influence either.

http://www.straight.com/news/512971/gwynne-dyer-fracking-winning-and-saudi-arabia-loses

BishopMagic:


In just one year the Saudis have reduced their reserves from $700bn to less than 10%

Mr., it reduced BY 10% not TO 10%.
The reserves fell from 2,750,000 to 2,500,000 SAR million ... A difference of 250,000 SAR million which is 10%.

atlwireles:
Bishop, check your numbers it is $672B, nevertheless I agree with your stands on saudi arabia.

http://www.bloomberg.com/news/articles/2015-06-28/saudi-foreign-reserves-drop-for-fourth-month-to-672-billion

Look at my source http://www.tradingeconomics.com/saudi-arabia/foreign-exchange-reserves

BishopMagic:



Fool look at the chart above.

mr fool... check this out - http://www.bloomberg.com/news/articles/2015-06-28/saudi-foreign-reserves-drop-for-fourth-month-to-672-billion

yang:
Its not $67bn its $672bn

dont mind the CLUELESS OP

tobtap:

mr fool... check this out - http://www.bloomberg.com/news/articles/2015-06-28/saudi-foreign-reserves-drop-for-fourth-month-to-672-billion

Fool you will need to fork out more cash next time you want to visit Mt Mohammed.


The Saudis want to increase revenue from Hajj.

BishopMagic:
With a foreign reserve of over $700bn a year ago, Saudi reserves have dropped to $65bn forcing the kingdom to issue bonds for the first time ever to raise a paltry $27bn. To make matters worse Saudi in the midst of trying to force Shale production down by flooding the market with cheap oil still maintains the most paternalistic social services and to boot is funding an expensive sectarian war in Yemen with them not making any progress what so ever.

The Saudis have to be the dumbest dumb phucks since creation.

why are you on Hospital admission bed collecting drips and injections on another person's sickness?

abacusCm:
why are you on Hospital admission bed collecting drips and injections on another person's sickness?

Saudi slave

Another illiterate wannabe analyst.
Reserves dropped TO $672b and in your illiterate mind u interpreted it to be that it dropped BY $672b.
Another product of a clueless education.

If the man down south was still in power with our foreign reserves going doing quite "naturally" under him, people would still argue that falling national reserve was a global phenomenon after Saudi with over $700bn reserves has come down too.

Thank God for PMB

BishopMagic:



Fool you will need to fork out more cash next time you want to visit Mt Mohammed.


The Saudis want to increase revenue from Hajj.

stop been stupid and childish....ur claim was wrong and we tried to correct u...but u resort to insults...shows ur maturity ...cheers

The op is a bastard who lacks comprehension. Do you know the difference between 'by' and 'to'?

tobtap:

stop been stupid and childish....ur claim was wrong and we tried to correct u...but u resort to insults...shows ur maturity ...cheers

Are Saudis reserves not falling?


Even at $65bn in less than a year, isn't that cause for concern amidst low oil price?

Thats how hatred for Islam makes people to reason like monkeys. Does it concern you anyway@foolish op?

abduljabbar4:
The op is a bastard who lacks comprehension. Do you know the difference between 'by' and 'to'?

Muslim filth why e dey pain you?


You be Saudi man?


Slave

abduljabbar4:
Thats how hatred for Islam makes people to reason like monkeys. Does it concern you anyway@foolish op?

Muslim filth stop showing your slave tendencies here.


Goat