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U.S. Growth in Shale Oil Upsets the Saudis and OPEC

By the way to the anti-fracking folks, this is good news. 

Why you wish to stop it is beyond basic logic?

Saudi Arabian billionaire Prince Alwaleed bin Talal has warned that the kingdom’s petroleum-dependent economy is increasingly vulnerable as rising production of U.S. shale oil and gas reduces global demand for crude from members of the Organization of the Petroleum Exporting Countries.

In an open letter dated May 13 addressed to Saudi Oil Minister Ali al-Naimi and several other ministers, which was published Sunday on Prince Alwaleed’s Twitter account, he said the kingdom won’t be able to fulfill its plan to increase its crude production capacity to 15 million barrels because of the shale threat.

Saudi Arabia, the world’s biggest oil exporter, is now pumping at less than its production capacity because consumers are limiting their oil imports, Prince Alwaleed said. This means the kingdom is, “facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil,” said the prince.

A Saudi official who asked not to be named confirmed that ministers received the letter in May.

Is there a downside to the U.S. becoming less dependent on OPEC nations?  Nothing for the U.S., the Saudis do have a point that they need to diversify their economy.  If 92 percent is stuck in one sector, you’re asking for trouble — both internally and externally — it is never economically wise to put all your eggs in one basket.

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