Maybe I need to order one of these
Posted on 11/30/2014 2:18:04 PM PST by thackney
OPEC just declared war on everyone-including itself.
The oil cartel’s hotly-anticipated meeting on Thursday ended with a whimper: No change to an output target that already wasn’t being observed. Oil prices, though, went bang: Brent crude fell 5% to around $72.40 a barrel after the decision was made. It will likely be years before we see triple-digit oil again.
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, has a beef with a number of oil-market participants. It also appears to have woken up to the fact that OPEC has once again lost its grip on prices.
Saudi Arabia’s chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran’s finances and capacity to oppose Riyadh’s aims in regional warzones such as Syria. As an added bonus, lower oil prices also hurt non-member Russia, another antagonist. The ruble fell another 2.5% against the dollar today.
Beyond geopolitics, Saudi Arabia must simply try to reassert its primacy in the market. For much of the past decade, OPEC seemed to be in the driving seat. In reality, high prices, particularly in recent years, partly reflected OPEC’s inability to ensure adequate supply in the face of strong demand from emerging markets such as China. The eventual result is as old as commodity markets themselves: efforts to mitigate demand and a surge in alternative supplies, especially from the U.S....
Saudi Arabia must instead try to maintain its own credibility. And unlike many other OPEC members, it used the good times to build up its foreign exchange reserves: $745 billion in September, enough to cover more than 30 months of imports, according to Barclays...
(Excerpt) Read more at online.wsj.com ...
Maybe I need to order one of these
I’m frustrated the price of my future F250 is likely going to climb.
OPEC(Saudi) policy on the oil price is playing hell with Iran’s economy and with Russia.
A declining oil price is highly damaging to Iran and to Russia among the majors. It is beneficial to the American economy though not to the oil companies. It is not bad that Venezuela is hurting. The decline also affects the black market price for ISIS oil.
The decline also affects the black market price for ISIS oil.
DING DING DING !!!!!
Saudis have reasons better than shale to let prices fallhttp://www.freerepublic.com/focus/f-news/3225105/posts
OPEC Production of Crude Oil by country
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=57&aid=1&cid=CG9,&syid=2010&eyid=2014&freq=Q&unit=TBPD
A few years ago, I was hoping for some fracking projects to get started in my area. The local revenue snagging banditos wanted to take too much, though. A company wanted to start exploring for uranium again, too, but the locals wouldn’t allow that at all. They didn’t want more working class trash moving up here, but they spread false stories about water being poisoned with uranium particles and the like instead of speaking their minds. Their real problem was their assumption that “property values would go down,” even though real estate is dead for the long run with or without energy production. Nuts. Both sides in politics are nuts.
On oil prices, those relying too much on debt or funny investment schemes will be some of the losers.
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Saudi Arabia, the de facto leader... also appears to have woken up to the fact that OPEC has once again lost its grip on prices.Yeah, right, that's why OPEC managed to engineer a price rise to $100+ / bbl. The reason the supply went up is US and Canadian production increases over the past ten years or so, in the face of a recent economic slowdown -- the Obama Recession, to go with the Obama Tax Hikes -- in the US.
Saudi Arabia’s chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran’s finances and capacity to oppose Riyadh’s aims...Number one, no, they don't, Iran's managed to become the leader in worldwide jihad; and number two, Zero/Lurch/Plugs/Jarrett have ensured that Iranian sanctions have been eased, and Iran gets $700 million a MONTH while stalling for time on its nuclear weapons plans.
...lower oil prices also hurt non-member Russia, another antagonist. The ruble fell another 2.5% against the dollar today.Way to bury the lead. EU and US sanctions against Pooty-Poot over his current aggression (in Ukraine) and threats (Moldova, Poland, the Baltic republics, Scandinavia, NATO) started to bite, but the cratering of world crude prices are financial vivisectioning.
Saudi Arabia must simply try to reassert its primacy in the market. For much of the past decade, OPEC seemed to be in the driving seat. In reality, high prices, particularly in recent years, partly reflected OPEC’s inability to ensure adequate supply in the face of strong demand from emerging markets such as China.Venezuela's aligned with Iran, and is a major supplier to the US market. Venezuela's sales to the US fell from 25m barrels to 24m from April to September, while Canada's (our largest single foreign source) rose from 95m to 106m in the same period. Russia's exports to the US fell from 12m to 7.8m; OTOH the UK's fell from 5m to 1.7m, with more of it staying in the EU. Saudi exports dropped from 48m to 30m, but only 23 million people live in the whole country. Similarly, Kuwait's dropped from 10m to 7m, but its population is a bit north of 7 million, 98 percent urban, and better educated than any Middle East country other than Israel and perhaps Dubai.
Saudi Arabia must instead try to maintain its own credibility...The writer of this should work on that too.
/bingo
Any chance this is a quid pro quo? The US helps the Saudis contain ISIS and the Saudis stick it to the Russians in Ukraine and Crimea?
That thing costs about $15K!
Like any two countries, the Saudis and the US have some parallel interests, and while Russia’s production (which in 2012 was surpassed by the US’) remains high, it has barely budged; increased production comes from less domestic consumption in a country where virtually everything is supported by petroleum and natural gas exports (and methane production and reserves are much higher than say ten years ago, with a lower price to go with it).
This 25% cratering of crude prices (and that’s just so far) over the past handful of months will take a bone saw to the NeoSoviet cash flow, as well as boost the EU economy and make it — and not the phony-baloney imperialist economic ‘community’ Pooty-Poot wants to impose on Eurasia — much more attractive and prosperous.
For ten years and more, OPEC has been de facto pricing in Euros, in order to keep crude price-stable in Europe (other than in periods of longterm increase), blissfully unconcerned about what the price fluctuations have been doing to the US economy. That has been of benefit to the NeoSoviet empire, as well as to the development of fields in the former (and Islamic) Central Asian SSRs, which pipe their oil to the EU and other markets via Russian territory.
Meanwhile, China has been experiencing a slowdown due to the stagnation of their export surplus with the US and inability to supply their own markets, while simultaneously having to import the needed crude at the posh prices of recent years. BRICS (Brazil, Russia, India, China, South Africa) is crumbling. Venezuela (another ally of Iran) has been getting a battery acid enema from the huge drop in crude prices (Venezuelan exports to the US have barely fallen, but that small drop will also leave a mark).
Egypt’s economy is and has been under attack by jihadists ever since Iran’s client, Morsi, was removed. Iran’s attempted takeover of Libya has been under air attack by Egypt and the UAE. Jihadists blew up a pipeline which formerly ran to Jordan, and now there’s a plan to sell Israeli natural gas into the Egyptian market. Lower crude prices will actually help Egypt overall.
Jordan’s situation is shaky; so is Turkey’s; so for that matter is the now-expendible Assad; ISIS/ISIL’s demise is greatly exaggerated, but it will manage to pull a few more polities into a common grave before it’s done.
“The other significant loser here may be OPEC itself....”
As in virtually all oil contracts in which the host country takes the lion’s share of oil production, falling prices always mean that those countries take the lion’s share of the hit of revenue when prices plunge.
Translation: oil companies are more downside-protected in international oil activities compared to US projects. The majors will much more aggressively go after those venues.
Means that OPEC is not really a loser here as more money will be attracted to their oil projects, although their overall revenue will decline.
So winners are consumers and third world countries possessing lots of oil.
Losers are those domestic companies who exploit US only oil.
You need a 454 with three 4 barrels. ;-)
I must be missing something. Why is falling prices for the oil result in more money to the oil projects?
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