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re: Saudis manipulating oil lower - ok with $80/barrel for next 2 years
Posted on 10/13/14 at 1:29 pm to Iosh
Posted on 10/13/14 at 1:29 pm to Iosh
SA is doing it to maintain market share. They didn't increase production. World production is at a high and then last month a bunch of Libyan production that had been off-line came back on adding approximately another 500MMBBL/Day. The Saudis, rather than cut production and defend pricing chose to cut prices and defend market share. The headline for the OP is misleading.
This post was edited on 10/13/14 at 1:30 pm
Posted on 10/13/14 at 1:55 pm to cwill
High price of oil encourages new market participants and new areas. It also encourages alternative energy sources. Both of these things are not kind to the long term economy of SA.
For a while, OPEC had us over a barrel (LOL) when it comes to oil. We had no other choice. Well, now, we have choices. OPEC knows they need to be competative.
So, they want to find the sweet spot - allow them to maximize profits, but not so high that it encourages competition.
For a while, OPEC had us over a barrel (LOL) when it comes to oil. We had no other choice. Well, now, we have choices. OPEC knows they need to be competative.
So, they want to find the sweet spot - allow them to maximize profits, but not so high that it encourages competition.
Posted on 10/13/14 at 2:24 pm to cwill
quote:
SA is doing it to maintain market share. They didn't increase production.
With the age of Ghawar and Safaniya the question that should be asked is can SA maintain the production level they are at for much longer? While some of the predictions about their true reserves were too alarmist feeding the peak oil crowd rig count alone over the last few years tells you oil is getting more capital intensive even for the Saudis.
Posted on 10/13/14 at 2:25 pm to BobBoucher
So gas will be $2.50 a gallon again?
Posted on 10/13/14 at 2:42 pm to ToulatownTiger
"So gas will be $2.50 a gallon again?"
I filled up Friday for 2.76 at a Costco, so why not?
I filled up Friday for 2.76 at a Costco, so why not?
Posted on 10/13/14 at 3:11 pm to TigerDog83
quote:
With the age of Ghawar and Safaniya the question that should be asked is can SA maintain the production level they are at for much longer? While some of the predictions about their true reserves were too alarmist feeding the peak oil crowd rig count alone over the last few years tells you oil is getting more capital intensive even for the Saudis.
I think all the Saudis can do at this point is raise prices through cutbacks but I don't believe they have the power any longer to flood the market through increased production. Those days are gone unless they turn up something new out in the desert. I read today that they are cutting prices to shore up market share ahead of Nov OPEC meetings. The speculation is that they want the other OPEC nations to share in the cutbacks to push prices back up.
This post was edited on 10/13/14 at 3:56 pm
Posted on 10/13/14 at 3:12 pm to N.O. via West-Cal
Dafuqqq. I paid $3.14 on northshore yesterday
Posted on 10/13/14 at 3:23 pm to Iosh
quote:
Maybe it's my social circle biasing me, but most of the people I heard squawking about "peak oil" were of the crazy libertarian persuasion.
It's a weird camp that tends be be doomers of all political stripes. It's not enviro nuts -- in fact, the enviro nuts think we can sort of just will our way to some green energy revolution.
cwill is a very level headed poster and the best guy to listen to here. I am still in the doomer camp, so I appreciate that he is picking through this news and weighing in that this is not a case of the Saudis flooding the market.
Posted on 10/13/14 at 3:27 pm to BayouBlitz
quote:Are you honestly suggesting Barack"CarbonFootprint"Obama pressured the Saudis (or anyone else) to make oil cheaper?
if you give Reagan credit for that, don't you have to give Obama credit for this?
Really?
This post was edited on 10/13/14 at 3:28 pm
Posted on 10/13/14 at 3:49 pm to TigerDog83
Didn't the Saudis announce(within the last 3-4 years) a new huge field was discovered and would be on-line soon? It was supposed to be close to the size of Ghawar.
I can't remember the field and I will try to find a link for it.
Also, could a future 'oil bust' be in store for us in the near future, like the 1980s?
I can't remember the field and I will try to find a link for it.
Also, could a future 'oil bust' be in store for us in the near future, like the 1980s?
Posted on 10/13/14 at 5:23 pm to BobBoucher
quote:
My guess is we won't see it low for two years - just long enough to bring Putin to his knees.
Putin has been watching too much Fox News if he thought the U.S. wouldn't work behind the scenes to chop Russia's legs off.
Im guessing Putin is counting on misinformation and nationalism to keep the people behind him. Probably playing the victim card..
Posted on 10/13/14 at 5:31 pm to upgrayedd
quote:
Why is SA doing this?
There's a rift going on in OPEC. SA is undercutting other OPEC nations to lock in their market share.
Posted on 10/13/14 at 7:40 pm to TigerDog83
quote:
With the age of Ghawar and Safaniya the question that should be asked is can SA maintain the production level they are at for much longer?
I do some work for an international drilling company and about six months ago the Saudis went all in as far as drilling goes.
This is actually a really smart move on their part.
Posted on 10/13/14 at 7:57 pm to NC_Tigah
quote:
Are you honestly suggesting Barack"CarbonFootprint"Obama pressured the Saudis (or anyone else) to make oil cheaper?
That looks to be exactly what happened. Kerry apparently visited SA a few weeks ago and negotiated a deal. Would certainly support Russia's assertion that SA's discounted prices are a political move.
quote:
Last Friday it was revealed that the purpose behind Secretary of State John Kerry's visit to Saudi Arabia a few weeks back was to sign a secret deal by which the leading OPEC state would saturate the markets with excess oil and cause
prices to fall for the global commodity. This move would have the consequence of causing vast harm to the Russian Rouble, and increase inflation and price instability for the Eurasian state.
LINK
Although Reuters reports that the deal was a guarantee by SA to make up for any oil disruption as a result of Iraq and Syria.
And here's an article from a better source talking about what an earlier post earlier said is Saudis simply fighting for market share.
LINK
This post was edited on 10/13/14 at 8:59 pm
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