Posted on 11/04/2014 4:57:33 AM PST by Zhang Fei
Oil prices tumbled to their lowest point in more than two years after Saudi Arabia unexpectedly cut prices for crude sold to the U.S., likely paving the way for further declines and adding to pressure on American energy producers.
Meanwhile, Saudi Arabia raised the prices for its oil in other locations, including Asia, where the country had cut its prices for four consecutive months.
(Excerpt) Read more at marketwatch.com ...
Do price differentials even work? What’s to prevent US buyers from shipping to Asia and pocketing the difference?
They are getting desperate.
They’re trying to hurt the business. After they drive them under, they will raise prices again.
Spending $2.5 a barrel to ship to gain a $1 price gain.
and they want to prevent a GOP landslide.
The GOP would be winning additional Senate seats if oil were still above $85/bbl.
our friends, the Saudis’!
let’s see...- offer their embassy in Turkey to Isil terrorists-
refuse to engage the Isil terrorists just outside the northern/eastern border-
NOW TRY to stop! OUR oil production by targeting
ONLY the U.S. with price cuts!
Don’t have to pay for the Democrat party anymore after these elections so they don’t need the money now and can focus on eliminating competition.
Depends on a few things, including freight differential and what type of crude the refineries are set up to handle. If I remember correctly, Saudi is heavy. Of corse, other factors do come into play.
Just one of a long line of fingers in the eye to the US.
What else can be expected with Captain Midnight at the helm.
“If I remember correctly, Saudi is heavy.”
I thought it was light sweet, very good crude.
Saudi Oil-Price Cut Upends Market
http://online.wsj.com/articles/saudi-oil-price-cut-upends-market-1415063053
Nov. 3, 2014 8:04 p.m. ET
excepts below:
...An industry official familiar with the move said it wasn’t a decision to undercut shale production, which analysts have frequently suspected to be the motivation for recent Saudi price reductions. Instead, he said the lower pricing was an incentive for refiners in the U.S. to get higher margins by buying more Saudi crude.
“It is about maintaining market share…It is becoming a complex strategy for Saudi Arabia,” said another industry official familiar with the move...
State-owned Saudi Arabia Oil Co. took the same strategy in 2011, raising Asian prices and cutting them in the U.S., said an industry official familiar with the move. At the time, the kingdom was taking advantage of the absence of Libyan oil exports, which had pushed prices higher in Europe and Asia more than in the U.S.
At Denver-based Whiting Petroleum Corp., which is a major company in the Bakken Shale in North Dakota, the company said it has no plans to cut production. Whiting’s shares fell 1.6%.
“Whether there’s oversupply or political threat, we’ve been through this,” said Jack Ekstrom, Whiting’s vice president of corporate and government relations.
Most analysts expect U.S. oil production to keep increasing unless prices fall below about $70 a barrel. Producers that own wells in costly locations or that have high levels of debt are more likely to pull back on investment first, analysts said....
http://www.economicpolicyjournal.com/2014/11/breaking-saudi-arabia-cuts-oil-price.html
They do, when you have a bumbling fool for president who won't allow exporting of oil./s
In reality, though, that doesn't even work. In a global economy, a price differential simply won't hold for long. The US will simply stop buying from Saudi Arabia, and buy elsewhere.
I'm confused, because I thought we were fighting Saudi Arabia and Turkey's wars in the Middle East. Is this punishment for fighting ISIS? Is Saudi Arabia trying to take down the US economy?
I really don't understand the intricacies of the globalist power plays. I'm pretty disgusted that the world can't rally around disintegrating ISIS. They're pure evil and the result of the mess we've made out of the Middle East and Northern Africa.
What am I missing?
Alaskan oil is heavy. Venezuelan oil is very heavy.
Saudi oil is very light. They can burn it directly in gas turbine generators, straight from the wellhead. They have to filter sand out of it first.
That would depend on the current spread between Saudi prices for exports to the US vs exports to Asia. It should cost roughly the same to ship to Asia vs the US. If US prices for Saudi crude are lower than Asian prices, it should pay for a US buyer to ship it to Asia after leaving Saudi port facilities, either directly or by transferring the cargo en route. Theoretically. I expect there are practical difficulties.
Seems like a shrewd play.They have enough money in holdings to knock off American producers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.