Posted on 04/18/2016 6:27:34 AM PDT by Hojczyk
Oil prices tumbled on Monday after a meeting by major exporters in Qatar collapsed without an agreement to freeze output, leaving the credibility of the OPEC producer cartel in tatters and the world awash with unwanted fuel.
Tensions between Saudi Arabia and Iran were blamed for the failure, which revived industry fears that major government-controlled producers will increase their battle for market share by offering ever-steeper discounts.
"OPEC's credibility to coordinate output is now very low," said Peter Lee of BMI Research, a unit of rating agency Fitch. "This isn't just about oil for the Saudis. It's as much about regional politics."
Morgan Stanley said that the failed deal "underscores the poor state of OPEC relations," adding that "we now see a growing risk of higher OPEC supply," especially as Saudi Arabia threatened it could hike output following the failed deal.
Oil prices have fallen by as much as 70 percent since mid-2014 as producers have pumped 1 to 2 million barrels of crude every day in excess of demand, leaving storage tanks around the world filled to the rims with unsold fuel.
Sunday's meeting in Qatar's capital Doha had been expected to finalize a deal to freeze output at January levels until October 2016 in an attempt to slow that ballooning oversupply.
But the agreement fell apart after top exporter Saudi Arabia demanded that Iran, which was not represented, should also sign up.
The Sunni Muslim kingdom of Saudi Arabia and Shia Islamic republic of Iran compete for influence in the Middle East, where they are currently fighting proxy wars in Syria and Yemen.
(Excerpt) Read more at ca.news.yahoo.com ...
It would be a great time to refill the STRATEGIC OIL RESERVE
that’s so obvious and it never crossed my mind
guess it’s not that obvious :)
It is pretty full already.
D’OHa
The OPECers have lost their leverage. They are almost powerless to influence prices for reasons of not getting along or the ability of shale producers to fill any gap in supply pretty quickly.
The days of OPEC may finally be coming to an end. Three years ago this Saudi Prince saw the writing on the wall. He has been yammering for diversification of the Saudi economy ever since.
From the Globe and Mail in 2013:
The 58-year-old nephew of Saudi King Abdullah made a name for himself as a maverick when he invested in Citibank in 1991 and made a killing by correctly betting the tottering bank would recover.
Now he is emerging as an activist in his home country with a rare public challenge to Saudi Arabia’s political elite, whom he believes are recklessly ignoring economic threats posed by shale oil discoveries in the United States.
The Prince makes this point repeatedly in an interview with The Globe and Mail, one of his first since he rattled global oil markets in July by disclosing on his Twitter account a letter to Saudi Arabia’s Oil Minister. The missive warned that the American shale oil boom would soon threaten demand for crude from members of the Organization of Petroleum Exporting Countries.
New shale oil discoveries “are threats to any oil-producing country in the world,” he says.
In less than two years, Prince al-Waleed says, the United States will be producing so much oil that it will be a competing exporter of crude. Oil prices currently hovering a little below $100 (U.S.) a barrel could sink as low as $80 over the next few years and potentially fall even further if more shale oil discoveries emerge in the United States, Europe and Australia.
“It is a pivot moment for any oil-producing country that has not diversified,” he says. “Ninety-two per cent of Saudi Arabia’s annual budget comes from oil. Definitely it is a worry and a concern.”
they brought Arabic Immersion to houston
I imagine the Saudis are investing heavily in the US green movement...its the only thing that can stop fracking.
The idiots in Washington have a policy of ‘buy high, sell low’.
how do you know?
But why don’t the rascally “speculators” simply “bid the price upward”? Oh, they never had that power? Who’d have guessed?
Know what?
http://www.azjournal.com/2013/09/18/4fri-contract-is-transferred-to-global-firm-good-earth-power/
BTW, GOOD EARTH, was given that contract by default, which means they disregarded the highest bidder in the original bid who was NOT pioneer.
The whole thing is, as usual, corrupt.
Probably. They can probably do the most damage possible that way.
you know...
Therefore, 0bama will drain it.
No, I don’t know. My clairvoyance has left me.
Should be a great summer, great autumn, great Xmas shopping season -- and a wonderful early November.
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