Gunfight at the Crude Oil Corral: US vs Saudi Arabia, and It Could Get Ugly

By On December 7, 2014 6:28 pm

Shale Energy Business Briefing: Sunday Analysis

By Rick Stouffer, Senior Energy Editor, Shale Energy Business Briefing

Falling crude oil prices are causing growing consternation in oil-producing countries worldwide, but plummeting prices have placed two nations in the middle of the OK Corral.

With proverbial six-guns strapped to their legs, eyes glaring across the fenced-in pen, each is determined to make the other blink, to cut production and re-establish a base price that will halt what has become a near freefall in price since June.

It’s the savvy, old Middle East producer, Saudi Arabia, king of OPEC (the Organization of Petroleum Exporting Countries), a country which controls 40% of worldwide crude production, vs American producers, the upstarts (even through the oil industry began in rural Western Pennsylvania in 1859), which technically don’t export crude, but are impacting world prices as their domestic output cuts US crude imports, even from allies like Canada.

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