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Why won't the world's big oil producers lower prices?
Posted on 5/4/22 at 9:28 am
Posted on 5/4/22 at 9:28 am
Why won't the world's big oil producers lower prices?
The world's major oil exporters meet on 5 May, amid calls from across the globe to bring down prices.
But members of oil producers' group Opec+ - which includes Russia - are not rushing to help out.
What is Opec+?
Opec+ is a group of 23 oil-exporting countries that meets every month in Vienna, to decide how much crude oil to put onto the world market.
At the core of this group are the 13 members of Opec (the Organisation of Oil Exporting Countries), which are mainly Middle Eastern and African countries. It was formed in 1960 as a cartel, with the aim of fixing the worldwide supply of oil and its price.
Nowadays, Opec nations produce about 30% of the world's crude oil, about 28 million barrels a day. The biggest single oil producer within Opec is Saudi Arabia - which produces more than 10 million barrels a day.
In 2016, when oil prices were particularly low, Opec joined forces with 10 non-Opec oil producers to create Opec+.
Among them is Russia, which also produces over 10 million barrels a day.
Together, these nations produce about 40% of all the world's crude oil.
"Opec+ tailors supply and demand to balance the market," says Kate Dourian, of the Energy Institute. "They keep prices high by lowering supplies when the demand for oil slumps."
Opec+ could also lower prices by putting more oil onto the market, which is what major importers like the US and UK want it to do.
LINK
The world's major oil exporters meet on 5 May, amid calls from across the globe to bring down prices.
But members of oil producers' group Opec+ - which includes Russia - are not rushing to help out.
What is Opec+?
Opec+ is a group of 23 oil-exporting countries that meets every month in Vienna, to decide how much crude oil to put onto the world market.
At the core of this group are the 13 members of Opec (the Organisation of Oil Exporting Countries), which are mainly Middle Eastern and African countries. It was formed in 1960 as a cartel, with the aim of fixing the worldwide supply of oil and its price.
Nowadays, Opec nations produce about 30% of the world's crude oil, about 28 million barrels a day. The biggest single oil producer within Opec is Saudi Arabia - which produces more than 10 million barrels a day.
In 2016, when oil prices were particularly low, Opec joined forces with 10 non-Opec oil producers to create Opec+.
Among them is Russia, which also produces over 10 million barrels a day.
Together, these nations produce about 40% of all the world's crude oil.
"Opec+ tailors supply and demand to balance the market," says Kate Dourian, of the Energy Institute. "They keep prices high by lowering supplies when the demand for oil slumps."
Opec+ could also lower prices by putting more oil onto the market, which is what major importers like the US and UK want it to do.
LINK
24
Posted on 5/4/22 at 9:29 am to djmed
Why won't Biden and his ilk approve leases and everything that goes with them?
Posted on 5/4/22 at 9:31 am to djmed
Basic economics.
When demand is low prices are low.
When supply is low prices are high.
Also the Saudis refuse to talk with xiden*.
Demand has not dropped.
Posted on 5/4/22 at 9:32 am to djmed
Only reason to lower prices would be to run other producers out of the market by making it unfeasible to produce, therefore contracting supply and raising prices long term.
You know, like Russia and Saudi did about two years ago.
You know, like Russia and Saudi did about two years ago.
Posted on 5/4/22 at 9:33 am to SantaFe
Biden sucking off Iran means Saudi won’t give him the time of day.
I don’t like either group but KSA is less reprehensible than Iran. Slightly.
I don’t like either group but KSA is less reprehensible than Iran. Slightly.
Posted on 5/4/22 at 9:34 am to djmed
Why won't Biden handle OPEC like he handled Corn Pop????
Posted on 5/4/22 at 9:42 am to Wtodd
"Biden has approved more oil leases than any other president ever".
- The left
Asked a buddy in the oil industry about this line. The "approvals" are for extending current leases which already are in place, and are not for new leases along with certain maintenance permits. Gotta ask the proper questions apparently. How many NEW leases without prior operation have been approved. Damn near, if not, 0.
- The left
Asked a buddy in the oil industry about this line. The "approvals" are for extending current leases which already are in place, and are not for new leases along with certain maintenance permits. Gotta ask the proper questions apparently. How many NEW leases without prior operation have been approved. Damn near, if not, 0.
This post was edited on 5/4/22 at 9:44 am
Posted on 5/4/22 at 10:05 am to djmed
Why doesn't the US increase production back to late 2019/early 2020 levels? How much would 2,000 barrels a day help? Granted it is only 11-12% of our consumption but it would help.
Instead, we are trying to convince countries that do not have our best interests in mind to increase their production. How about we tell the Saudis to increase production or we are permanently pulling our troops out of the Kingdom and give them 60 days to comply. The royal family can't remain in power without the US military presence so let them decide what they want.
Instead, we are trying to convince countries that do not have our best interests in mind to increase their production. How about we tell the Saudis to increase production or we are permanently pulling our troops out of the Kingdom and give them 60 days to comply. The royal family can't remain in power without the US military presence so let them decide what they want.
Posted on 5/4/22 at 10:26 am to Wtodd
The word is permits not leases
Posted on 5/4/22 at 10:56 am to djmed
Its almost like there are policy differences between the Biden and Trump administrations.
I guess stolen elections have consequences at the pump.
I guess stolen elections have consequences at the pump.
Posted on 5/4/22 at 10:59 am to djmed
I've said this 100 times on here probably.
Work in the petrochemical industry as a supplier. My company, and other peers of mine that also work in that sector are employed by companies that all make in the range of Net 30 to 100 percent margins.
You know what most "oil companies" as you call them make as Net margins? Between 3 and 10 percent.
Anyone who thinks they should lower prices should invest heavily in said stocks.
Work in the petrochemical industry as a supplier. My company, and other peers of mine that also work in that sector are employed by companies that all make in the range of Net 30 to 100 percent margins.
You know what most "oil companies" as you call them make as Net margins? Between 3 and 10 percent.
Anyone who thinks they should lower prices should invest heavily in said stocks.
Posted on 5/4/22 at 11:00 am to Bearcat90
Pretty much.
Exxon may make record revenues in good years but the amount spent to get that return is insane and the potential for loss is unlimited.
Exxon may make record revenues in good years but the amount spent to get that return is insane and the potential for loss is unlimited.
Posted on 5/4/22 at 11:00 am to SantaFe
quote:
Basic economics. When demand is low prices are low. When supply is low prices are high. Also the Saudis refuse to talk with xiden*. Demand has not dropped.
Even more basic. Cartels dgaf
Posted on 5/4/22 at 11:03 am to djmed
Or they could build the Keystone pipeline.
Posted on 5/4/22 at 11:06 am to djmed
How much do the oil companies profit per gallon ?
Posted on 5/4/22 at 11:08 am to djmed
Same reason you won't lower your salary.
Posted on 5/4/22 at 11:10 am to WhiskeyThrottle
quote:
How many NEW leases without prior operation have been approved. Damn near, if not, 0.
That's not true, either.
Posted on 5/4/22 at 5:08 pm to djmed
Why won’t big oil companies just raise prices when oil has hit $20 a barrel in the past instead of laying people off and shutdown work?
Posted on 5/4/22 at 6:00 pm to djmed
Because that's not how business works.
Posted on 5/4/22 at 6:04 pm to djmed
Russia won’t lower prices as long as they’re using oil sales to fund their war.
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