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Oil plummets 30% as OPEC deal failure sparks price war
CNBC ^ | March 8,2020 | Pippa Stevens

Posted on 03/08/2020 5:03:21 PM PDT by Hojczyk

Oil prices plunged 30% in early trading after OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production, leading to fears of an all-out price war.

International benchmark Brent crude futures plummeted 30% to $32.05 per barrel. U.S. West Texas Intermediate crude dropped 27% to $30 per barrel, its lowest level since Feb. 22, 2016.

“This has turned into a scorched Earth approach by Saudi Arabia, in particular, to deal with the problem of chronic overproduction,” Again Capital’s John Kilduff said. “The Saudis are the lowest cost producer by far. There is a reckoning ahead for all other producers, especially those companies operating in the U.S shale patch.”

After the initial drop the losses were pared somewhat, with each contract trading down slightly more than 21%.

On Saturday, Saudi Arabia announced massive discounts to its official selling prices for April, and the nation is reportedly preparing to increase its production above the 10 million barrel per day mark, according to a Reuters report. The kingdom currently pumps 9.7 million barrels per day, but has the capacity to ramp up to 12.5 million barrels per day.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Politics/Elections
KEYWORDS: 1moretime; covid19stockmarket; energy; hydrocarbons; maga; oil; oilprice; opec; stockmarket
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To: samtheman

Our cost per barrel at the well is significantly higher than the arabs. They are at less than 2 bucks per barrel if I recall.

They can drop and drop the price and cause us serious financial difficulties.


41 posted on 03/08/2020 5:26:05 PM PDT by llevrok (Vote while it is still legal)
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To: Starcitizen

I think the SPR is pretty full.
They have actually considered shrinking it because the US is not dependent on imports as previously.
Better informed folks than myself have to make that call.


42 posted on 03/08/2020 5:26:55 PM PDT by nascarnation
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To: llevrok

Except that they’ve got so many folks on welfare that they can’t stand low prices for long. Once money stops, then the natives get restless and revolution can’t be counted out.


43 posted on 03/08/2020 5:29:15 PM PDT by abb
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To: DIRTYSECRET

It is $2.20 in Ellsworth Maine today!


44 posted on 03/08/2020 5:29:21 PM PDT by Maine Mariner
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To: Hojczyk

Cheap energy means cheap everything. In the long run it’s fantastic for the economy.


45 posted on 03/08/2020 5:29:45 PM PDT by Mr Ramsbotham ("God is a spirit, and man His means of walking on the earth.")
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To: DIRTYSECRET

Bring me $2/gallon gas and I’ll believe it.
*******************************
Well, if things don’t change that could be headed your way.


46 posted on 03/08/2020 5:31:49 PM PDT by House Atreides (Boycott the NFL 100% — PERMANENTLY)
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To: bigdaddy45

And when the Saudis raise the price, there will be an increase in fracking and more off shore production.
EC101 supply and demand.


47 posted on 03/08/2020 5:31:53 PM PDT by Maine Mariner
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To: Hojczyk
🙈 - they need to add a black swan icon
48 posted on 03/08/2020 5:32:41 PM PDT by 11th_VA (May you live in interesting times - Ancient Chinese Proverb)
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To: iontheball
It’s not at all simple anymore when we are a producer. The fracking industry is out of business with these prices.

I'll repeat what I said when those on here said Frackers couldn't survive in under $60/barrel markets:

it's all about wringing out cost and increasing efficiencies in fracking.

They did it to survive sub $60/bbl oil and they can do it again. Automate, Automate, Automate.

49 posted on 03/08/2020 5:33:42 PM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: aMorePerfectUnion

“ We used to say lower oil prices good for America. Do we still say that?

Except in Texas and Oklahoma...”

Plenty of indirect labor / Small business support the Oil workers. When a barrel of oil gets in the low 40’s Crews don’t get sent out / layed off. My Step Sisters small Motel business that mostly services Oil Workers in Flatonia TX. gets hit hard when oil prices drops.


50 posted on 03/08/2020 5:33:55 PM PDT by DAC21 ( and Naflet)
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To: Hojczyk

This gives the states controlled by rates to tax tax tax


51 posted on 03/08/2020 5:35:30 PM PDT by ronnie raygun (nicdip.com)
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To: 05 Mustang GT Rocks
Last night in San Antonio 1.87 at QT, 1.83 at Walmart.

Still $2.59/gal here in the People's Socialist sh*thole of Illinois @ 30 miles S.W. of Shitcago.

52 posted on 03/08/2020 5:35:35 PM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: DAC21

The Dallas economy is much more diverse since the last oil price fall in the 80s... but it still ripples through the Texas economy.


53 posted on 03/08/2020 5:36:24 PM PDT by aMorePerfectUnion
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To: iontheball

The frackers can restart as quickly as they can shut it down.


54 posted on 03/08/2020 5:36:35 PM PDT by WASCWatch
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To: DIRTYSECRET

Gas has been 1.97-2.05 in Louisiana for weeks.
But this news may change all that.


55 posted on 03/08/2020 5:37:24 PM PDT by DeplorableGirl
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To: Hojczyk

Still Over $2.50 for gas. And it has not come down one bit in the last couple of weeks. I wonder who is pocketing the difference?


56 posted on 03/08/2020 5:37:44 PM PDT by Revel
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To: usconservative

Surprising because the refinery where most of the fuel comes from (BP Whiting - one of the largest in the US) is just around the corner from Chicago.


57 posted on 03/08/2020 5:37:49 PM PDT by nascarnation
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To: Mr Ramsbotham
Cheap energy means cheap everything. In the long run it’s fantastic for the economy.

It’s good for:

- low income voters that don’t own stock

- elderly on fixed income or low exposure to stock market

- traders like me that (tip - DWT was $5 a few weeks ago, probably $14 tomorrow)

58 posted on 03/08/2020 5:38:20 PM PDT by 11th_VA (May you live in interesting times - Ancient Chinese Proverb)
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To: nascarnation

You don’t just start up again overnight. A healthy $50-$60 per barrel ensures domestic production continues and we pay a reasonable price for gas. Lower oil prices aren’t necessarily good


59 posted on 03/08/2020 5:40:01 PM PDT by bigdaddy45
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To: DIRTYSECRET

It was $2.25 today in NE Florida.


60 posted on 03/08/2020 5:41:37 PM PDT by entropy12 (You are either for free enterprise or want gov't to interfere with corporate issues.)
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