Thanks for the comment. Definitely not an expert here on international hedging... but Mexico made a lot press about hedging the full year 2015 @ $76+ . So, it would seem plausible that Saudi Aramco (or major players in and around S Aramco) would be much bolder in pushing the price war with some sort of hedging. Either way, the low prices will start to hurt eventually and the market will return as uneconomic oil projects are postponed.
I'm guessing the Saudi's hedged very heavily last year before starting the price war tactics. If so, they're likely benefitting from the hedges now, thus temporarily minimizing the loss of revenue from low prices. What would be really nice to know is how far out the Saudi hedges go. Once their hedges are up and the low prices start having a negative impact, you can bet the price war will end.
"it needs to be at $70 for this to make a red cent"
It doesn't need $70 this year; hedges will do the trick. Over 60% of production @ about $90 through June, and about 45% production @ about $80 Jul-Dec. As a short, you must be 1) betting oil prices won't rise, 2) costs won't decline, and 3) there will no M&A by 2016. Good luck with that...
4.3M of the 5.3M inventory build was due to an increase in imports. The remainder was due to a decrease in refinery inputs. Production decreased slightly again. So, at the end of the day, the inventory build was due to our refineries not processing our domestic crude. Wonder how much crude oil exporting is being discussed at the big Oil & Gas conference this week?