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Published: 2015-12-01 10:04:00

In the organization of petroleum exporting countries (OPEC) members, Saudi Arabia is most determined "not production attitude" of a country. On the one hand, Saudi Arabia wants to maintain the existing market share;Saudi Arabia, on the other hand, because of its cost advantage, reserves and not lose the "hand".

Since June 2014, the international crude oil price has been "halved".In the face of the pattern of the crude oil market supply exceeds demand, many expert analysis, were it not for mass production action, or temporary geopolitical conflicts, international oil prices, it is difficult to go up in a short time.

In lower oil prices, however, become a kind of new normal hit, OPEC members did not reduce production for the coordination of the price of crude oil. Among them, as the world's largest oil exporter and OPEC's biggest producer, Saudi Arabia is to "take the lead in" expressed "capricious" attitude, give up the production, such as "can be in at least eight years successfully cope with low oil prices", "we will again with will, wisdom and experience through the plunge in turbulent times" have been all kinds of media such as the declaration.

Represented by Saudi Arabia, the OPEC on refused to reduce crude oil output for our favorite stylemakers "capricious"?According to part of the American media interpretation, OPEC in front of the drop in oil prices is one of the key "indifferent" to the largest extent, grab the international energy market share, to fight the competitors in the United States, until the high cost of producers out of business, let new energy such as shale oil producers unprofitable.

From Saudi Arabia itself, on the one hand, the oil production cost is low, less debt, foreign exchange reserves are relatively abundant, allowing international crude oil prices "free fall", still can make profits.On the other hand, the country is currently cuts in government spending. As a senior adviser to former oil minister Mohammed al-sabah said: "if you don't cut government spending, most countries can only deal with low oil prices for four years."At the same time, to the national economy heavily dependent on crude oil exports for Saudi Arabia's oil revenues decline will affect other areas of energy input, thus restricting the country's energy diversification development, when one day, crude oil prices hit bottom line risk is unavoidable. In addition, other members of OPEC may not have "end" of financial resources with low oil prices.In fact, the weak overall demand of crude oil and finished fuel market competition intensifies, the influence of Saudi Arabia's some refiners have run under low capacity utilization, and the U.S. gulf coast counterparts, these refiners advantage not only no profit, the overall operating also appears more difficult. Moreover, temporarily at the expense of the price of crude oil in order to gain market share strategy can even temporarily endanger American shale oil producers, but not necessarily true in the long-term work in international energy game pattern.

At present, the entire Middle East turmoil, still did not get rid of the threat of terrorism. For foreign currency reserves is consumed, the domestic unemployment population continues to increase, Saudi Arabia, continue to "capricious" refused to cut crude oil output is open to question. Perhaps, this is the new king salman need long-term challenges in the future.

 

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