Posted on 10/07/2015 12:50:47 PM PDT by Lorianne
Saudi Arabia on Sunday made deep reductions to the prices it charges for its oil, hard on the heels of cuts last month by rival producers in the Gulf.
With U.S. production still increasing despite lower oil prices, members of the Organization of the Petroleum Exporting Countries are battling to keep their share of the last growing markets in Asia.
In a list of official prices sent to customers, state-oil company Saudi Aramco cut the price of its light-crude deliveries to Asia by $1.7 a barrel. As a result, it switched to a discount of $1.6 a barrel against the rival Dubai benchmark from a premium of 10 cents a barrel previously. The company also cut its prices for heavy oil by $2 a barrel to the Far East and by 30 cents a barrel to the U.S.
The move come as Iran, Iraq and other countries in the Middie East made deeper cuts in their official prices than Saudi Arabia last month.
Saudi Arabia has vowed to keep pumping at high levels as it hopes lower oil prices will stimulate Asian demand and hit rival production in the U.S. that is expensive to produce. But while Chinese economic growth is slowing, U.S. production rose by about 68,000 barrels a day in July, according to the U.S. Energy Information Administration.
(Excerpt) Read more at marketwatch.com ...
He all ready is in Syria. The way to understand the current mess in the ME is Iran and Putin vrs the Saudis.
How did he destroy it? I thought the lower price of oil destroyed it.
“the saudis are a good friend and this action hurts the russians”
The Ministry of Truth has flatulated.
A knife in the back for the Persians.
That’s what’s going on here.
Meanwhile, uh, yeah:
U.S. officials said Russia’s targeting of its allies on the ground was a direct challenge to Mr. Obama's Syria policy. Underlining the distrust, the Pentagon decided against sharing any information with Moscow about the areas where U.S. allies were located because it suspected Russia would use that information to target them more directly or provide the information to President Bashar al-Assad's regime.
"On day one, you can say it was a one-time mistake," a senior U.S. official said of Russia’s strike on one of the allied rebel group’s headquarters. "But on day three and day four, there's no question it's intentional. They know what they’re hitting."
And as for OPEC:
Three facts motivate Putin.
First, two regions utterly dominate world oil markets. The Middle East and Russia together ship 60 percent of all oil traded (45 and 15 percent, respectively). Meanwhile, American firms are by law prohibited from engaging in this vital global marketplace; more on this shortly.
Second, oil matters. It provides 97 percent of the global fuel needs for all the engines that transport everything on land, sea and air. No viable substitutes exist at any price for liquid hydrocarbons at the scale society needs. And the world will consume more oil, not less, as far into the future as it matters for sensible policymaking.
Finally, price matters. Here the U.S. has upset the apple cart. Entrepreneurs using new technologies have unlocked a shocking increase in oil supply. U.S. shale fields have recorded the fastest increase in oil production in history. As a result, crude prices have collapsed from north of $100 to south of $50 a barrel.
The emerging consensus? Cheaper oil is the new normal.
How does Syria matter? While it's no oil-producing powerhouse by OPEC standards, even Syria's paltry production accounted for 25 percent of that nation's economy (although ISIS now controls most of Syria's oil fields). But Syria is ideal transit territory for pipelines to European markets for oil or gas originating in Iraq and Iran.
More important, given the build-up of Russian military men and materiel in Syria, is geography. Damascus is closer to Baghdad than Washington is to Boston, and not much further away from Riyadh than New York is from Chicago. Russia's military is now no longer deployed mainly on its Baltic borders but is in the world's premier petroleum neighborhood. Russia is not an OPEC member and has often claimed no desire to join. But they may have just joined by default.
hat tip: InfidelBloggersAlliance
Can popcorn be 3D printed yet?
Guess it’s not 1973 any more.
The move come as Iran, Iraq and other countries in the Middie East made deeper cuts in their official prices than Saudi Arabia last month. Saudi Arabia has vowed to keep pumping at high levels as it hopes lower oil prices will stimulate Asian demand and hit rival production in the U.S. that is expensive to produce. But while Chinese economic growth is slowing, U.S. production rose by about 68,000 barrels a day in July, according to the U.S. Energy Information Administration.Just in time for winter heating oil -- those magnificent Saudi bastards!
“Why are we still buying Saudi oil when our drillers are going bankrupt? They are the main financiers of Muslim terrorism around the world.”
Only 13% of oil imported to the U.S. comes from Saudi Arabia. As to answer your question, oil in fungible and refiners buy oil that fits their specs and has the cheapest price. If American producers cannot make money at $50 a barrel, they will shut down.
They are stepping up their economic battle against Russia and Iran, not us.
“This is exactly the opposite of what Putin wants.”
IMO, this is one of the top two reasons there are Russian warplanes and troops in Syria.
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.