Posted on 03/09/2020 1:49:36 PM PDT by Oldeconomybuyer
Oil prices crashed in Asia on Monday by around 30% in what analysts are calling the start of a price war.
Top oil exporter Saudi Arabia slashed its oil prices at the weekend after it failed to convince Russia on Friday to back sharp production cuts.
Oil cartel Opec and its ally Russia had previously worked together on production curbs.
The benchmark Brent oil futures plunged to a low of $31.02 a barrel on Monday, in volatile energy markets.
Oil prices have tumbled since Friday, when Opec's 14 members led by Saudi Arabia met with its allies Russia and other non-Opec members.
With global oil production now far outpacing demand, oil analyst Martjin Rats of Morgan Stanley said Opec members are now expected to pump more oil to capture market share.
"Given Opec countries now have very little incentive to restrain production, oil markets look sharply oversupplied," Mr Rats said in a research note.
Overall, oil prices were last at these levels in January 2016, and are near a 16-year low.
Energy analyst Vandana Hari, of research firm Vanda Insights, said the markets were shocked by the disagreement on production cuts between Opec and Russia, which was surpassed last year by the US as the world's top producer.
"The collapse of the Opec/non-Opec alliance is a major shock to the oil market, and it comes with the added challenge that we don't have the full picture of what lies ahead," Ms Hari told the BBC.
(Excerpt) Read more at bbc.com ...
Time for the US to get some market share out of this.
It’s not Trump’s fault, but president’s get blame/credit for all kind’s of things that happen on their watch. The great economy during the Clinton years certainly wasn’t because of him, but he got the credit.
Still waiting for a decrease in gas prices to trickle down to the pump.
Says Mr Rats.
shale did its thing and got us to number one... suspend it and drill baby drill...
Climate change hurt the worst. Film at 11.
I am no expert as the “trader” in my name is broker/trader in meat commodities not the market.
My question is for a knowledgable person in the fields that can advise me on oil stocks, futures etc.
My gut tells me that this idiocy in the oil market would provide an excellent buying opportunity....At least in the long term (4-6 years and up).
So what does 30 a barrel mean at the pump?
The Saudis have a better chance to “ride it out” because they have a way more modern oil production infrastructure—all that Saudi Aramco earnings had to go somewhere. Go to their gigantic oil terminal in Dhahran—it is amazingly modern.
Why would US oil producers gain market share on lower prices? The US hydrocarbon boom was fueled by high prices. Low prices will have the opposite effect.
Higher taxes.
$1.75 a gallon gas?
Between the resumption of US sanctions, the capping of their chief terrorist, public uprisings, coronavirus, and the cratering of oil prices, President Trump will have dropped the mullahcracy into its well-deserved grave without firing a shot. The Russians want to see the Iranian oil production to fall off to push down world supply, and want Iranian thugs to leave Syria. The Iranian-Russian-Turkish alliance is left fragile at best, until the mullahs finally fall, and our Commander-in-Chief will not have fired more than one shot to accomplish all this.
Our shale oil production costs are significantly higher than Saudi Arabia's or Russia's. My understanding is that they are trying to squeeze out some US producers.
...Still waiting for a decrease in gas prices to trickle down to the pump.
Goes up fast, and down slow...
Bump #14
BTTT
If it stays too low at the pump for too long, the swamp critters will just add a brand new shiny TAX for us. We have alot of State swamp tributaries that will go on regardless of what we get done in DC.
Actually, rather than perform a kinetic retribution against Iran for the missile strike on Saudi gas separation facility, Saudi Arabia is following President Trump’s lead and attacking the Iranian economy.
Iran oil sales were severly damaged by President Trump’s sanctions. Now, a 30% price cut in the severely reduced sales will be very damaging to the Iranian economy.
It’s all being done in time to be over well before the election.
Russia, Russia Russia is still on the media mind but Iran is the target
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