Posted on 11/26/2014 4:51:31 AM PST by thackney
As oil prices continue to plummet, the once-dominant international cartel of producers is losing its sway over the global energy markets.
At its meeting on Thursday in Vienna, the Organization of the Petroleum Exporting Countries, the group of 12 oil producing nations, is under pressure to at least announce modest cuts in an effort to shore up the markets. But any cuts would be modest and would probably do little to prop up oil prices, assuming the countries even stick to an agreement.
OPEC is caught in a swirl of forces that are depressing prices, down more than 25 percent since June to around $80 a barrel. And the cartel’s muscle, namely its control over one-third of the world’s oil production, is not enough to fight them.
Asian and European economies are slowing, which has cut demand. And supply is booming, with shale drilling in the United States adding as much as a million barrels a day this year.
OPEC’s cuts, provided the member nations come to an agreement, are likely to amount to only a million barrels a day. At that level, they are not likely to make an appreciable difference in a market that produces more than 90 million barrels daily.
If anything, a move by OPEC would only complicate the economic calculus for its member nations, by reducing their revenues. Venezuela, Nigeria and Iran have come to rely on oil money to pay for social programs vital to their stability.
“OPEC has been caught by surprise by the market,” said Badr H. Jafar, president of Crescent Petroleum, an oil and gas company based in the United Arab Emirates. “This may be the meeting where they try to regain control.”
Founded more than a half century ago, OPEC wrenched supremacy over the oil market from the giant multinational...
(Excerpt) Read more at nytimes.com ...
West Texas Intermediate fell Tuesday to the lowest level in more than four years after nations supplying a third of the world’s oil failed to pledge output cuts before this week’s OPEC meeting.
Saudi, Russia pre-OPEC talks yield no oil output cut
http://www.reuters.com/article/2014/11/25/us-opec-meeting-idUSKCN0J90VC20141125
Impromptu talks between Saudi Arabia, fellow OPEC member Venezuela and oil powers Russia and Mexico yielded no agreement on Tuesday on how to address a growing oil glut, ending without any plan to cut output despite a collapse in prices.
In a day of shuttle diplomacy before OPEC’s output meeting in Vienna on Thursday, energy officials from non-members Russia and Mexico rushed to the Austrian capital to push OPEC kingpin Saudi Arabia on the 30 percent price fall since June.
Saudi has kept the market guessing about its response to crude’s fall amid rapidly rising U.S. shale output, but Tuesday’s talks had led to speculation in some quarters that Riyadh might back a coordinated cut involving non-OPEC members.
Venezuelan Foreign Minister Rafael Ramirez told reporters after the talks that while all sides agreed current prices were “not good” for producing countries, no coordinated output cuts were arranged on Tuesday.
“We discussed the situation in the market, we shared our points of view, we need to keep in contact and we agreed to meet again in three months,” Ramirez, who until recently was oil minister and president of state oil company PDVSA, said.
excerpted
I wish them misery.
Somehow....all this new oil discovered in North America.......I’m reminded of the worship song “OUR God is an awesome God” - for some reason....
For over 10 years, I’ve been saying that we have more oil in the north American continent that all of the oil in the Middle East. Truth be told, if we started utilizing all the natural resources we have, oil, gas and coal, we could be the richest nation in the world. We actually will be able to pay off all our debts and become the worlds biggest lender. Now, I’m being proved right. All the oil and gas we are producing is coming out of “PRIVATE PROPERTY”, not from any government lands. And look at what it’s doing to the price of oil and gas, world wide. But, because of all the regulations coming out of Washington, we aren’t allowed to export our natural resources. We need to “PEE” in the ears of these Washington politicians and give them a new set of brains.
Only if you include stuff like the Green River formation which isn't actually oil, or commercial available at today's prices.
It’s called competition. Imagine it in health care.
So, if they cut production, then we up production and OPEC loses revenue. So, that will result in OPEC increasing production, thus lowering prices.
Screw them OPECkers.
Time to put countries that want to do us harm out of their misery.
Announce tomorrow that Keystone is being fast tracked and all oil leases waiting on approval have been approved.
That should get Russia out of Ukraine, topple the Marxists in Venezuela, send illegals back to their home countries and force the Saudi’s to reign in ISIS.
All done with a pen and a phone. So simple.
Eventually, when needed, someone will find a way to extract the oil from these oil shale efficiently. After all, no one thought about “OIL FRACKING” just a few years ago. Just leave it to the inventive minds of the American people.
We have been hydro fracturing since the 1940’s. Perhaps you haven’t heard of it before then, but those of us in industry certainly have.
Maybe he meant to say the new techniques used in high volume hydaulic fracturing along with the developed horizontal drilling techniques to make extraction of tight and shale oil possible.
That may be so, but it only recently that “FRACKING” has made a difference in our oil and gas production.
Did you see this thread?
OIL IS CRASHING ($68.90 Bl)
http://www.freerepublic.com/focus/f-news/3231572/posts
Actually, the difference came from horizontal directional drilling.
When that was applied to the tight formation, the difference started. The same wells are hydro frac’d, but that alone would not make the difference.
Who cares whether it’s “HORIZONTAL DRILLING” or hydro fracking or both. It accomplished the problem of having to produce more oil and gas than those Middle Eastern Muslim countries that had us over a barrel. In the past, all they had to do was threaten to cut their oil production, when ever they wanted the western countries to do as they demanded. You remember what they did during the Carter administration, and the long gas lines we had to endure? Now, they can’t do that again. We are producing more oil and gas now than Saudi Arabia. Now, all we have to do is TELL THIS ADMINISTRATION to open up all those GOVERNMENT LANDS for oil and gas drilling.
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