Posted on 03/10/2020 9:06:06 AM PDT by Hojczyk
The clash of oil titans Saudi Arabia and Russia sparked a 25% slump in crude prices on Monday, triggering panic selling and heavy losses on Wall Street's main stock indexes,
U.S. President Donald Trump spoke with Saudi Arabia's Crown Prince Mohammed bin Salman in a call on Monday to discuss global energy markets, the White House said on Tuesday.
Amin Nasser, CEO of Saudi Aramco said the oil giant would increase supply to 12.3 million barrels per day in April for customers inside the kingdom and abroad.
That's 300,000 bpd above its maximum production capacity, indicating Aramco may also free up crude from storage.
Saudi Arabia has also agreed with Kuwait to resume output from jointly operated oilfields in the so-called Neutral Zone, production which is not accounted for under Aramco's output capacity of 12 million bpd.
U.S. Treasury Secretary Steven Mnuchin told Russia's ambassador to the United States on Monday that energy markets needed to stay "orderly" amid rising concerns that extra supply from Saudi Arabia and Russia could trigger bankruptcies among higher-cost U.S. shale oil producers.
Saudi Arabia has been pumping around 9.7 million bpd in the past few months. The kingdom holds hundreds of millions of barrels of oil in storage so its can supply oil above its production capacity.
Brent oil prices jumped 10% on Tuesday above $37 per barrel after Russian energy minister Alexander Novak said Moscow was ready to discuss new measures with OPEC, effectively offering an olive branch to Riyadh.
But Saudi Arabia’s energy minister Prince Abdulaziz bin Salman appeared to rebuffed the idea.
"I fail to see the wisdom for holding meetings in May-June that would only demonstrate our failure in attending to what we should have done in a crisis like this and taking the necessary measures,” Prince Abdulaziz told Reuters.
(Excerpt) Read more at finance.yahoo.com ...
been snooping around oil stocks..if anyone knows one that held its gain let me know..because the ones I am watching havent. And Cop has now gone negative.
SPX briefly went negative but bounced back some.
btw, I think I got my timing off on Euro close. They havent changed time yet like we have
Mnuchin is kind of an idiot. Because Russia will love it if our shale producers go bankrupt.
Ten dollar a barrel oil and 50 cent a gallon gas sound good to me.
Been screwed by the energy companies long enough; this Californian ain’t never going to forgive any oil or gas company that gouged the hell out of us when they had the chance.
Now that I think about it, 5 bucks a barrel sounds about right.
It won’t be $5 under any circumstances. The times changed.
“Russian energy minister Alexander Novak said Moscow was ready to discuss new measures with OPEC, effectively offering an olive branch to Riyadh.”
In other words, Russia blinked first in its brief price war with the Saudis. It costs Russia about twice as much as it does Saudi Arabia to produce a barrel of oil. Waging a price war with the low-cost producer is a fool’s game.
Gotta love that “free market” for oil when nations have to agree on levels of supply.
“Russia blinked first in its brief price war with the Saudis”
Hopefully, this gets resolved before it gets worse.
North Dakota is basically being held hostage by Putin.
They won’t.
They can suspend production until either the price of crude rises enough or technology allows for the shale production of crude/natural gas to come down.
The Saudis need the higher oil price ..to maintain the welfare state
“The Saudis need the higher oil price ..to maintain the welfare state”
Russia is much more dependent on high oil prices than is Saudi Arabia. That’s why Russia blinked first, and the Saudi oil minister rebuffed Russia’s olive branch.
I think the Crown Princes got more than they bargained for in Putin.
“Now that I think about it, 5 bucks a barrel sounds about right.”
What you think is good for a few seconds is irrelevant. It’s a temporary price war.
Besides, California pols will step in and raise taxes so pe\rices stay at $4 a gallon there.
So, don’t worry. You’re guaranteed price stability.
The Saudis are also trying to knock out Iran with this.
Not just nations. Here’s where OPEC learned how to do it.
https://en.wikipedia.org/wiki/Railroad_Commission_of_Texas
A crisis for the petroleum industry was created by the East Texas oil boom of the 1930s, as prices plunged to 25 cents a barrel. The traditional TRC policy of negotiating compromises failed; the governor was forced to call in the state militia to enforce order. Texas oilmen decided they preferred state to federal regulation, and wanted the TRC to give out quotas so that every producer would get higher prices and profits. Pure Oil Company opposed the first statewide oil prorationing order, which was issued by the TRC in August 1930. The order, which was intended to conserve oil resources by limiting the number of barrels drilled per day, was seen by small producers like Pure as a conspiracy between government and major companies to drive them out of business and foster monopoly in the oil industry.[9]
None are more dependent on high oil prices than our domestic fracking producers. Their cost/bbl is much higher than SA and RU. If this price war endures, the marginal US producers will be bankrupted under a mountain of debt, ready to come crashing down.
Drove by a gas station in LA yesterday set at 3.99, most have fallen to 3.35. Tennessee was playing with 1.99.
The price difference is Democrats vs Republicans.
Amin Nasser, CEO of Saudi Aramco said the oil giant would increase supply to 12.3 million barrels per day in April... 300,000 bpd above its maximum production capacity... Saudi Arabia has also agreed with Kuwait to resume output from jointly operated oilfields in the so-called Neutral Zone, production which is not accounted for under Aramco's output capacity of 12 million bpd... Saudi Arabia has been pumping around 9.7 million bpd in the past few months. The kingdom holds hundreds of millions of barrels of oil in storage so its can supply oil above its production capacity. Brent oil prices jumped 10% on Tuesday above $37 per barrel after Russian energy minister Alexander Novak said Moscow was ready to discuss new measures with OPEC... Saudi Arabia’s energy minister Prince Abdulaziz bin Salman... "I fail to see the wisdom for holding meetings in May-June that would only demonstrate our failure in attending to what we should have done in a crisis like this and taking the necessary measures,” Prince Abdulaziz told Reuters.
And that's how you do that.
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