OPEC's worst nightmare

[King Wenceslas]

Texas is about to create OPEC's worst nightmare

The map lays out OPEC's nightmare in graphic form.

An infestation of dots, thousands of them, represent oil wells in the Permian basin of West Texas and a slice of New Mexico. In less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30 a barrel.

OPEC's bad dream only deepens next year, when Permian producers expect to iron out distribution snags that will add three pipelines and as much as 2 million barrels of oil a day.

"The Permian will continue to grow and OPEC needs to learn to live with it,'' said Mike Loya, the top executive in the Americas for Vitol Group, the world's largest independent oil-trading house.

Saudis Concede

Saudi officials concede that the tsunami is coming. OPEC estimates that to balance the market and avoid an increase in oil inventories, it needs to pump about 31.5 million barrels a day next year, or about 1.4 million barrels a day less than what it did in October.

Hoping this puts the knife into the House of Saud's heart. Just think of oil at $20 a barrel (with the recession coming) with Saudi Arabia's finances needing $80 to $100 a barrel to survive. All the SH in the ME will die also. Sweet justice for what they have done to the West for the last 14 centuries.

[Heinrich]

Doesn't Saudi Arabia's supply if oil leverage our debt? Wouldn't that cycle the petrol dollar into oblivion and unleash a cyclone of deflation then inflation?