There goes the Kenyan Economy

[Georgesoros]

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With the 10% drop in oil prices. Cant mine at <$50/barrel
Russia is being crushed real bad.

[RV Pundit]

Actually it only the US that will be crushed by the oil prices. This is just the whole strategy of Saudis and other oil producing countries.If you didn't know the US economic recovery has been mostly due to SHALE OIL production...that has added anything upto 300B USD dollars to the economy and has made US self-sufficient in Oil production and consumption, and helped it improve it's forex reserves. US was in fact starting to export oil.

Shale production is not sustainable <80 dollars. The free flowing oil that Russia,Saudis and Venezualian will still be profitable...albeit at lower profit. It cost very little to mine saudi or russia or nigeria oil...

That is why OPEC have sat down few days ago and refused to intervene.

US [and anyone thinking shale] will have to halt production and start buying from middle east and african once again.This will devastate the big economies and state govs  of texas,california, north dakota and oklahoma...in the short term.

Obviously the beneficiary will be oil consumers everywhere in the world.

Turkana oil..we will have to know the numbers it would take to make it profitable....

[Georgesoros]

Pundit
Russia may go bankrupt if this continues for a while - 1-2yrs.
China will swim in wealth.
Of course Nigeria has to adjust their budget - Oil <30%.
If Turkana is too expensive they will stop till prices go UP.

[Mr Mansfield.]

USA has cut deals with its middle east partners to supply more,push down prices and punish putin and maduro of Venezuela,oil and currency traders have made alot...i think Kenya need to relook oil investments as prices push down to $50 VS $45 upstream costs,

Without Prejudice.

[Georgesoros]

Mansfield,
In the short term - I think, they will remain low. In the long term prices will edge up. Time to buy a gas guzzler?
The Saudis will make people buy bigger cars so that they can create a bigegr customer base, THey will then turn around and charge more after people have bought bigger SUVs. Ingenious right?

[MOON Ki]

Oil production and consumption, and helped it improve it's forex reserves

In the way most countries (and their wananchi) view such things, forex reserves have little significance to the USA, keeping in mind that most folks want to hold their foreign reserves in US dollars and use that currency for the big trades.    US foreign reserves since 1960 have barely tripled and the USA probably ranks something like No. 20 worldwide in such things.     

That is why China has something like $4 trillion worth of foreign reserves---majority  in dollars---whereas the USA has only $150 billion (less than Singapore, Mexico, Algeria, and the like).

That's how it is when your currency is king and accepted everywhere.

[RV Pundit]

You're right but remember the more US import oil from Saudis and others; the more they've to ship out dollars to those countries; that is forex; even if USD is being used;

For me the target of oil  prices drop...is not Russia or Venezuela or Iran..it obvious US's shale oil.

In the way most countries (and their wananchi) view such things, forex reserves have little significance to the USA, keeping in mind that most folks want to hold their foreign reserves in US dollars and use that currency for the big trades.    US foreign reserves since 1960 have barely tripled and the USA probably ranks something like No. 20 worldwide in such things.     

That is why China has something like $4 trillion worth of foreign reserves---majority  in dollars---whereas the USA has only $150 billion (less than Singapore, Mexico, Algeria, and the like).

That's how it is when your currency is king and accepted everywhere.

[RV Pundit]

How when US is one of world biggest oil producer now...oil industry in US has been responsible for 1% growth rate[just check GDP contribution of Oil now and 5yrs ago]...in an economy that has been grown at 2%..that is 50%. All growth happening in US is mainly happening in states with shale production going on..texas and the likes. Russia and other cheap oil producers profit will decline..but they are not going out of business like Oil industry..and of course the financiers of them including banks and equities.

USA has cut deals with its middle east partners to supply more,push down prices and punish putin and maduro of Venezuela,oil and currency traders have made alot...i think Kenya need to relook oil investments as prices push down to $50 VS $45 upstream costs,

Without Prejudice.

[Georgesoros]

Pundit
Too early to tell whether Russia, Venezuela will stay afloat. Imagine if someone cut your income by 30%!! that is huge. Youll have to redo your budget and do away with some things. Thats what wll happen. Those that sell to Russia, Nigeria, Venezula will have to ship less or wait a few years to be paid.

[RV Pundit]

For well managed oil economies..they save for a rainy day. Norway, Russia and Saudis do that. Part of the oil money is annually kept in oil fund for days like this.

Pundit
Too early to tell whether Russia, Venezuela will stay afloat. Imagine if someone cut your income by 30%!! that is huge. Youll have to redo your budget and do away with some things. Thats what wll happen. Those that sell to Russia, Nigeria, Venezula will have to ship less or wait a few years to be paid.

[MOON Ki]

You're right but remember the more US import oil from Saudis and others; the more they've to ship out dollars to those countries; that is forex; even if USD is being used;

Your earlier statement referred to "forex reserves".  That is quite different from the above, and now I'm lost on the point you are trying to make.   Never mind.    I think we can agree that importing less oil is generally good.

[RV Pundit]

In any case USD is not the only global currency now..China and Russia already trade in their own currencies..there is a mix of currencies...in any case it either US is sending the dollars to Saudi...or Saudis are increasing their 600B debt to the US..

The point is very simple..the target is SHALE OIL PROD...which has been good for US economy...probably the only booming sector in the US economy..responsible for 50% of growth in few yrs.

US is now biggest oil producer thanks to shale...Russia is third after Saudis..tell me why fall in prices...will not affect the bigggest oil producer.

Your earlier statement referred to "forex reserves".  That is quite different from the above, and now I'm lost on the point you are trying to make.   Never mind.    I think we can agree that importing less oil is generally good.

[Georgesoros]

[RV Pundit]

We will wait and see. Saudis control this game. They did it late 70s and 80s...crushing the world economy..and they are doing it now.