Posted on 12/10/2014 2:39:09 PM PST by thackney
Saudi Oil Minister Ali al-Naimi on Wednesday shrugged off suggestions that the world's biggest crude exporter might cut production to reverse the deepest price slump in years, saying the kingdom's output had remained steady through last month.
Naimi's comments on the sidelines of an annual U.N. climate change conference in Lima, Peru, stuck to the message he laid out at OPEC's meeting two weeks ago: The market would be left to balance itself without the kingdom's intervention. That stance was seen as a shift from longstanding Saudi policy to act as a swing supplier.
Oil prices have dropped $13 a barrel since that November meeting. Yet asked on Wednesday whether he thought it would be necessary to reduce oil production prior to OPEC's next scheduled meeting in June, Naimi responded: "Why should we cut production? Why?"
At the same event, Venezuela's foreign minister and top OPEC emissary Rafael Ramirez provided his country's answer to Naimi's question: OPEC must act, he told Reuters, because "that is our job. We want stability in the market and predictability."
Ramirez said Venezuela would evaluate whether to back a call for an emergency OPEC meeting after seeing how oil prices perform in the first quarter.
He said it would be up to Nigeria, the current head of the cartel, to summon members to an extraordinary gathering to respond to the price collapse.
"It's worrisome not just for Venezuela, but for all countries in OPEC," he said.
Last month, Gulf producers overruled Venezuela's push for an OPEC production cut.
The comments highlight growing division within the Organization of the Petroleum Exporting Countries. Core Gulf producers have the cash reserves to ride out a spell of lower prices, while more vulnerable economies like Venezuela's are already strained by sub-$100 crude.
Naimi said the Kingdom produced 9.6 million...
(Excerpt) Read more at rigzone.com ...
The unspoken word in this article is “Iran”, Saudi Arabia’s arch-enemy. The lower oil prices are KILLING them and their patron Russia.
They also want to put fracking out of business. Let them try. If they want to give away their oil, let them.
They already mortally wounded Venezuela. They’re about to default.
When oil extraction gets difficult they will join the fracking party themselves.
Oil extraction difficult in Saudi Arabia? Only if ISIS takes over the wells and apply their Islamic expertise.
One wonders what impact this is having on Saudi revenues and how long they can go before they feel the squeeze? There has to be a pain point eventually. Nations have bills to pay.
I have no idea how this plays out. No doubt that there are geopolitical games being played by the Saudi’s, but when your revenues are cut in half certain “dislocations” usually set in.
The Saudis did have the privilege of controlling the price increase until early 2008. At that point even they could not produce enough to satisfy and control prices. This was a large contributor to the 2008 financial collapse.
Who can afford real estate when your cost of living went up significantly? We hunkered down. Then the unstable mortgage insurance industry tipped as the value of the underlying property dropped.
Now we have oil rig loans, but most of the operators hedged, so their unraveling will be slow. This will dampen the financial hit and allow time to scale down.
After that, it’s back to dealing with the change to affordable energy.
Selling oil at market prices isn't giving it away. They're now at the point that decades of rigging the price at too high a level above production costs has incubated competitive suppliers and driven long-time oil consumers towards substitutes. US consumption peaked in 1978 even though inflation-adjusted GDP is almost 3x what it was back then.
They are gazillionaires. Their idea of hard times is to shut down their artificial snow park.
Farmers do not threaten to cut off crops here in America when prices do not go their way.
Markets go up and down but there is always something in it for everybody.
A gain or a loss!
Get over it.
You will have the amount of money God intends you to have. Amen.
“how long they can go before they feel the squeeze? There has to be a pain point eventually. Nations have bills to pay.”
The Saudi’s have lots of cash, LOTS of gold, and AAA+++ credit. They can take it.
THIS IS ALL ABOUT ISIS, and bankrupting their ability to make money, which is by selling Oil. ISIS is a dagger pointed straight at Mecca, and the Saudi Royal Family, and they know it.
That's pretty funny. Why don't you tell that to Odumbo. Any nation with a printing press can pay its bills.
Cuba needs a buddy, and for a long time Russia was that buddy. Then they collapsed, and Venezuela became their buddy. Now Venezuela is collapsing, and they need another buddy. We could be that buddy, or maybe China. I'd prefer us. We could negotiate an end to the blockade, and when the Castro's go, even give them territory status like Puerto Rico.
That's Dubai, UAE.
Their oil is expected to be gone by 2016.
Sheikh Mohammed bin Rashid Al Maktoum, started 20 years ago to make Dubai something other than just oil.
When the world economic down turn happened, Dubai got pinched big time. What was the Burj Dubai, the worlds tallest building, was ready to default, during construction. The $1.5 billion project was bailed out by Abu Dhabi and renamed Burj Khalifa, in honor of Sheikh Khalifa bin Zayed bin Sultan al-Nahyan of Abu Dhabi.
Dubai built the Palm Islands which sold out quickly. The World Islands are another story, with the project unfinished and most islands barren.
Dubailand, a huge theme park was put on hold in 2008. They restarted the project in 2013. Current estimates are that it will open in 2020.
Ski Dubai
Who cares if these terrorist-supporting moozlums have less money? Really.
Saudi Arabia has already started using hydro frac.
This is the reason why cartels are never good for a consumer
‘”The drop in oil price is not good for anyone,” Ramirez said in an interview, reiterating that Caracas sees $100 as a ‘fair price’.’
What is ‘fair to a producer is unfair to a consumer.
I was posting to correct HiTech.
The article is about Saudi Arabia.
HiTech said "They are gazillionaires. Their idea of hard times is to shut down their artificial snow park."
Ski Dubai is in Dubai. Dubai is the United Arab Emirates, not Saudi Arabia, and Dubai has had its share recent money woes.
Every nation has an economy and expenses. SA has no other real income. They may be able to weather this better than other area countries, but only for the short term.
The US oil industry is only a small piece of many pieces of the US economy.
SA's oil industry is all about oil exporting.
The US can't export it's oil. We are all about consumption and importing.
If crude is cheap, we'll just buy the cheap stuff and hold on to our own. The majority of the US oil industry can withstand it by refining.
In time, Saudi Arabia WILL HAVE TO raise prices just to survive.
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