The empire strikes back: Saudi Arabia takes on U.S. shale

[Geee]

Watchdog.org:

Drivers are enjoying a drastic drop in gasoline prices but behind the scenes, the oil-rich nation of Saudi Arabia appears to be playing a game of economic chicken with U.S. shale producers whose technological advances have completely reshaped the world’s energy landscape.

 

“They want to prove to the world that they’re still in control,” energy analyst Dan Steffens, president of the Energy Prospectus Group in Houston, told Watchdog.org.

 

The price of a barrel of oil has plunged nearly 40 percent since late June, and since Thanksgiving the drop in gasoline prices has accelerated so fast that some areas of the country may soon see the price dip below $2 a gallon.

 

THE SAUDI SQUEEZE PLAY: OPEC leader Saudi Arabia appears to be trying to put pressure on U.S. shale oil producers in an attempt to protect its share of the global market.

Using horizontal drilling and hydraulic fracturing, U.S. oil producers in places like the Bakken formation in North Dakota, Pennsylvania’s Marcellus shale and the Permian Basin in West Texas and eastern New Mexico have spearheaded a more than 30 percent boost in U.S. oil production in recent years.