US and Saudi to expand energy exports
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The CEO of Aramco, Saudi Arabia’s state-owned oil company, said his firm plans to meet growing global demand by expanding production. The OPEC leader is already pumping at near record levels, and the move is a disappointment to U.S. oil companies which are relying on growing demand to drive prices higher.
OPEC can only meet about a third of the world’s demand, though, so there are customers still out there for North American crude. They just won’t pay as much for it.
“Pipeline capacity across the U.S. – Mexico border is expected to double in the next three years, reaching 14.7 billion cubic feet per day by the end of 2019,” said Anne Swedberg, Platts Analytics manager, Platts Mexico Energy Monthly.
Aramco appears determined to flood the world with cheap crude, and I’ve written extensively about their motivations. But U.S. companies need to assume that Saudi Arabia has no intention of allowing oil prices to rise so high again that they lose their market share.
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