Posted on 06/01/2025 1:00:30 PM PDT by E. Pluribus Unum
Summary
LONDON/MOSCOW, May 31 (Reuters) - The world’s largest group of oil producers, OPEC+, stuck to its guns on Saturday with another big increase of 411,000 barrels per day for July as it looks to wrestle back market share and punish over-producers.
Having spent years curbing production - more than 5 million barrels a day (bpd) or 5% of world demand - eight OPEC+ countries made an modest output increase in April before tripling it for May, June and now July.
They are spurring production despite the extra supply weighing on crude prices as group leaders Saudi Arabia and Russia seek to win back market share as well as punish over-producing allies such as Iraq and Kazakhstan.
"Today’s decision only goes to show that market share is on top of the agenda. If price will not get you the revenues you want, they are hoping that volume will," said analyst Harry Tchilinguirian of Onyx Captal Group. The eight countries held an online meeting on Saturday to set July production. They also discussed other options, an OPEC+ delegate said. On Friday, sources familiar with OPEC+ talks had said they could discuss an even larger hike.
The eight members, set to meet online at 0900 GMT, could discuss an increase larger than 411,000 bpd for July, two sources familiar with OPEC+ talks and two OPEC+ delegates said. They could also keep the hike at 411,000 bpd, other sources said.
All sources declined to be identified by name due to the sensitivity of the matter. OPEC and authorities in Russia and Saudi Arabia did not...
(Excerpt) Read more at reuters.com ...
What happened to drill baby drill?
I heard a report just the other day that the U.S. output for barrels daily is as high as it’s ever been?
Perhaps it is a good time to add to the Strategic Petroleum Reserve.
good point....
You want market share? I’ll give you market share!
You want profits? I’ll give you market share!
Note that Russia gets about 16% of the authorized increase.
As for price and marketshare — this is about two things. Kazahkstan has been cheating on its quota. Most do, but they have been vocal about it.
And the second thing is the destruction of US shale. There has been a recent avalanche of people from the Permian using the P word. Peak. The Permian stretches to New Mexico from West Texas. The rig counts are falling and shale oil has no resilience if you are not drilling — which you won’t do at today’s interest rates and price. NoDak has yet to return to preCovid output. The P word is up there, too.
They’re punching up Russian cash flow in the process.
I take that back, January of 2025 it was .20 higher at 13.60M per day and the latest was 13.40M per day.
Will they ever be blamed for global warming by the hoax deniers?
Exxon bought out Pioneer to get the remainder of the tier 1 and tier 2 leases and acreage in the Permian. Pioneer had pretty much drilled out the prime tier one with megapads of 24 wells each from 2014 onwards. I was a frac engineer and a ops geo in that basin for PNR and Exxon and Chevron at different times since 2010 still do SWD from time to time.
Most people have no idea how sheep the decline curve for a wolfcamp shale well is. You have to continually drill them to keep production up. Diamondback CEO is stone cold dead right that at the current WTI price and interest rates no one is going to invest billions in expanding production. Only lease obligation wells will get POP. We need $80 oil to be steady that’s the new economic point because we debased the USD with massive quantitative easing. The dollar is simply worth less and every American is poorer because of it and it is and was absolutely by design.
It’s good to see at least a fewq people get it. I am guessing you were in the Industry at some point.
Not entirely. I was military. The Air Force understands oil in a threat context but the details of initial production flow and the decline curve on the right side of peak gets to a level of numbers where the 2-stars getting briefed will tune out. They just want to know if 2008 will recur, where the direction was down.
They do understand viscosity and constituent yields and absolutely are aware middle distillates are sparse in shale. It’s where the pilot program of bio-JP8 (jet fuel from sources other than boiling crude) and these are smart guys. They know they announced success and they know at that time they had to look green, but they also know it will never scale to fuel a fighter squadron.
It amazes me that people won’t look at the relentless down graph at the 2008-9 trough and recognize that is where we go when shale dies. The usual reply is “I’ve been hearing we are out of oil since the 1970s!” Well, if they look at that graph they will see that we WERE out of oil. Only financial apocalypse and 0% interest rates 2009 started squeezing light crude out of microscopically small permeabilities in North Dakota. We’re going back to that, and the steepness of the curve that you are clearly aware of says . . . we get there soon.
Gas prices around her have been steadily declining. $2.66 today.
“Perhaps it is a good time to add to the Strategic Petroleum Reserve.”
ABSOLUTELY. I’m sure Prez Trump plans on doing just that when the prices drop more.
When you've got just one card to play, the fact that it's a low number...
It’s working oil is down to 62.62
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