And here it, John Kemp noting that Saudi might not go after shale -- I did not read the article but if accurate it speaks volumes about Saudi's oil and natural gas reserves. Saudi is facing an existential crisis and regardless of what they might say publicly, they would go after "new" reserves in their own country if it was economically feasible.
Anyway, regardless of the idle chatter, here's John Kemp's graphic today via Twitter and my comments that follow.
March 9, 2018: Saudi Arabia's official reserve assets, monthly change in US$ billions --
- Saudi reserves were already dropping significantly by the time Saudi reacted with flooding the market with oil, hoping to "break" US shale
- we will never know how "bad" it would have gotten for Saudi if they had not announced they were going to open the spigots
- it is interesting: I think "we've" all forgotten the reason Saudi said they were opening their spigots; I do distinctly remember that the Saudis said it was not in reaction to US shale, and that they were not doing this to "break" US shale; I think they said they were trying to get the attention of the Iranians, which, in hindsight, seems an incredibly weak argument
- look how long it took for the "recovery" even after Saudi said they would cut production
- even with the cut in production and the "shakedown of the sheiks," the recovery is not particularly noteworthy
- when I was doing the calculations, my "rule of thumb" was that Saudi was losing about $5 billion / month during the surge; more than $5 billion loss in any month was staggering; less than $5 billion / month was noteworthy