Skip to comments.Oil Prices Down As OPEC Fails To Agree Output Ceiling
Posted on 06/02/2016 8:35:11 AM PDT by bananaman22
The much anticipated OPEC meeting in Vienna on June 2 ended pretty much as expected: the group once again failed to put any production targets in place.
Without a ceiling on output, all OPEC members will continue to produce as they see fit, leaving the oil market to sort itself out. The result was largely anticipated, given the lack of agreement at several prior meetings.
However, the meeting in Vienna was not without some news. OPEC members managed to agree on several small bore issues, which could be viewed as a modest success, especially after the apparent hostility on display in Doha in April and the utter failure in December of last year.
For example, OPEC appointed a new secretary-general, Nigerias Mohammed Barkindo, the former head of the Nigerian National Petroleum Corporation. He will take over from Libyas Abdalla El-Badri, who has been in the job for several years on an interim basis because the group could not agree on a new leader.
(Excerpt) Read more at oilprice.com ...
And right back to flat.
/CL + .04
This is amazing, since there is no enforcement mechanism. For decades they agreed on targets, which drove up speculative pricing, and they all cheated. The fact that they can’t even go back to agreeing in public to drive up prices indicates some serious back-room politics that isn’t reaching the press.
I’ll wager that back room politics is Sunni vs. Shia. The middle east is at war, but they are doing it economically. Saudi Arabia is hurting itself badly in terms of foreign exchange. There has to be a reason they are pursing policies that could potentially cause the downfall of the House of Saud. (The king stays in power by paying off problems. Paying away problems has been bad politics since recorded history began.)
Gas here in Florida up 25 cents overnight .
For a few years now, I’ve felt Saudi’s oil options were getting more narrow. They recently finished a ‘near off-shore’ facility...which made me wonder, why are the Saudis drilling for the ‘hard to get’ oil, when they have so much shallow oil? I think the answer must be that their existing fields are declining in production.
So no more 1950’s technology and ultra cheap extraction costs....and the price gap between Saudi oil and oil produced elsewhere gets smaller.
So, their problems get even worse...and the only thing that holds the ‘kingdom’ together is buying off the populace. It could get real ugly. And now there is always fracking in the background. Unless we self impose some environmental nonsense, the Saudi’s will never again be able to ‘kill off’ the US oil industry - so they get no reward whatsoever when prices drop...just the hurt.
Oh, and a certain idiot just released hundreds of billions of dollars in frozen Iranian assets. Its almost like we’re trying to establish Iran as the new leader in the middle east.
Swami says: war will continue in the region.
“Swami says: war will continue in the region.”
The region has been at war for 13 centuries. The twentieth century, because of the west and the destruction of the Ottoman empire, was probably the calmest and safest for over a thousand years. The world, and even Muslims, will not be truly safe until Islam has been wiped off the face of the Earth. (I’d guess that half the people killed by Muslims were other Muslims they disagreed with.)
The reason ‘d’etre for OPEC has always been to line the coffers of the those nations at the expense of the producing world. Now, when many more sources of oil drive the prices down, they cannot agree to limit their production because they have no other sources of income/revenue. For 60-70 years they have drained the treasuries of the west and lived extravagantly as elites in their own countries while the peasants still live in 7th century conditions.
So, they will not individually or collectively draw down production as the demand for cash is strong-good for the rest of the producing world to a degree ( yes, $10 oil is not good for newer entries to the market, espc using more costly technologies).
Their greed will be their collective downfall-someday the average peon in the ME will realize they can have a piece of the pie, as “Allah wills it”.
“the love of money is the root of all evil”
Oil futures are up, slightly at 49.32. Probably still going to 60, but maybe not.
The Liberals just added a 16 cent a liter tax here , just wait until Trudeau adds his share
There’s a soft fall coming, onto a soft floor, which is going to bend a lot.
The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).
From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership in January 2009, but this was reactivated from 1st January 2016.
This means that, currently, the Organization has a total of 13 Member Countries.
The OPEC Statute distinguishes between the Founder Members and Full Members - those countries whose applications for membership have been accepted by the Conference.
The Statute stipulates that any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.
The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.
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