Enjoying The Cheaper Gas? Thank Saudi Arabia

Monday , 24, November 2014 Leave a comment

The United States has enjoyed cheaper prices at the pumps for over a month thanks to falling oil prices world-wide. Paying less for fuel means people will have extra cash to spend on other things like holiday meals, parties and gifts.

But while we’re giving thanks and anticipating less money spent at the gas station, the reason why gas prices are so low may have you wondering; Why it’s happening, and more importantly, how long will it last?

That all depends on Saudi Arabia.

Oil prices began to drop earlier in this fall. Some people thought perhaps the United States’ new shale oil boom was the reason, others were curious how it could be happening when one of the larger oil producers in the world, Russia, has been in conflict with Ukraine most of the year. They invaded Crimea, forced annexation at gun point, and currently lead an invasion force into Eastern Ukraine that began in the Spring. As much as it would be nice to think Saudi Arabia is increasing production and exports to drop the price and stick it to Russia and Iran, that’s collateral damage to the real target – The United States.

America’s rapid push into fracking has made the nation a leading producer of oil. Of course, we’re destroying our land, air, and water to accomplish that with an enormously expensive process, but who needs clean drinking water when there are profits in the ground? By the way, are you interested in selling the mineral rights to your land yet?

If Saudia Arabia gets their way and the price of oil drops further, then there will be no profits for the frackers and KXL pipeline pushers. Saudi Arabia’s target is $70 a barrel. That would be low enough to make fracking financially pointless in the United States.

Don’t think this means the oil companies are going to give up. They’re already figuring out ways to drive prices up so the oil companies currently fracking still have a viable reason to stay in business. So far, Saudi Arabia is winning the battle, and the price of oil keeps dropping. If you’re wondering how much a barrel of oil needs to cost to keep America’s frackers in the black, it’s around $100 a barrel. See why $70 a barrel could mean the death of the American shale oil boom? The oil companies won’t be able to afford to stay in business, and we will continue to buy gas made from Middle Eastern oil.

And that’s just the way the Saudis want it.

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