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RE: OPEC, for some quiet moments.. - marsexplorer - 12-30-2015

Not sure if this has been posted before but I don't remember seeing it and thought it might be of interest.

http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679




RE: OPEC, for some quiet moments.. - ArtM72 - 12-30-2015

'marsexplorer' pid='65588' datel Wrote:

Not sure if this has been posted before but I don't remember seeing it and thought it might be of interest.

http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679

That is some article.

I didn't understand the basis for these statements:

"Brown and Foucher showed that the inflection point to watch out for is when an oil producer can no longer increase the quantity of oil sales abroad because of the need to meet rising domestic energy demand..."A report by Citigroup recently predicted that net exports would plummet to zero in the next 15 years."

Until I saw these

". In addition, desalination plants meet about 70 percent of the kingdom’s domestic water supplies....But desalination is very energy intensive, accounting for more than half of domestic oil consumption."

I normally laugh when people say 'water is the new oil' but this example is different.  When you're using that much oil making water you have a real problem.  It wouldn't be so bad if there was a better salt removal technology than reverse osmosis, or if that technology was seeing significant improvements.  Unfortunately neither is the case.  RO is expensive and it is mature and it remains the least worst option for desalinization.  

Saudis need to get their solar project moving, not to mention what appears to be the low hanging fruit of conservation http://www.arabnews.com/news/460158 or this generational time bomb posited by the author might become very, very real.




RE: OPEC, for some quiet moments.. - Putncalls - 12-30-2015

'ArtM72' pid='65594' datel Wrote:

'marsexplorer' pid='65588' datel Wrote:

Not sure if this has been posted before but I don't remember seeing it and thought it might be of interest.

http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679

That is some article.

I didn't understand the basis for these statements:

"Brown and Foucher showed that the inflection point to watch out for is when an oil producer can no longer increase the quantity of oil sales abroad because of the need to meet rising domestic energy demand..."A report by Citigroup recently predicted that net exports would plummet to zero in the next 15 years."

Until I saw these

". In addition, desalination plants meet about 70 percent of the kingdom’s domestic water supplies....But desalination is very energy intensive, accounting for more than half of domestic oil consumption."

I normally laugh when people say 'water is the new oil' but this example is different.  When you're using that much oil making water you have a real problem.  It wouldn't be so bad if there was a better salt removal technology than reverse osmosis, or if that technology was seeing significant improvements.  Unfortunately neither is the case.  RO is expensive and it is mature and it remains the least worst option for desalinization.  

Saudis need to get their solar project moving, not to mention what appears to be the low hanging fruit of conservation http://www.arabnews.com/news/460158 or this generational time bomb posited by the author might become very, very real.

Ya gotta watch those "peer reviewed" Saudi peak oil predictions.




RE: OPEC, for some quiet moments.. - admin - 12-30-2015

Saudi Arabia is burning through foreign reserves at an unsustainable rate and may be forced to give up its prized dollar exchange peg as the oil slump drags on, the country’s former reserve chief has warned.

Saudi riyal in danger as oil war escalates - Telegraph

Many energy analysts like to make predictions at the end of the year for the coming year. Instead, I'll point to five possible surprises in energy--surprises because few people expect them to happen. I am not predicting that any of the following will happen, only that there is an outside chance that one or more will occur. Naturally, these surprises would move markets and policy debates in unexpected directions.

5 Possible Surprises In Energy For 2016 | OilPrice.com

Investors are losing faith in an oil-price recovery next year as Iran prepares to add more crude to a global glut. That’s good news for American drivers who have enjoyed the lowest gasoline prices in six years. Hedge funds reduced bets on rising prices to a three-month low and kept bearish wagers near a record high in the week ended Dec. 22, data from the U.S. Commodity Futures Trading Commission show.

Iran adding to global oil glut dims hopes for recovery next year

China Petrochemical Corp., China’s second- biggest oil and gas producer, plans to double annual shale gas production capacity at its Fuling project in southwest China in the next two years to 10 Bcm.  The Beijing-based company known as Sinopec Group has steadily produced 15 MMcmgd of shale at the site for more than a month, it said in an e-mailed statement on Tuesday. Current gas production could meet daily gas demand of 30 million families, it said.

Sinopec plans to double fuling shale gas capacity by 2017




RE: OPEC, for some quiet moments.. - jft310 - 12-30-2015

From STP post 12-28 above
Barnett Shale has
volumes of 53 Tcf of shale natural gas, 172 MMbbl of shale oil and 176 MMbbl of natural gas liquids, according to an updated assessment by the U.S. Geological Survey (USGS). This estimate is for undiscovered, technically recoverable resources.
USGS doubles Barnett shale gas estimate on new study

Per Hession Interoil hopes to prove out 52 TCF in time on its acreage . Interesting that the Barnett Shale could be similar in size to Interoi acreage both based on undiscovered technically recoverable resources .


RE: OPEC, for some quiet moments.. - marsexplorer - 12-31-2015

Iran claims it can produce oil at only $1 per barrel:

Nonetheless, with OPEC on the ropes, the broad principle applies: ExxonMobil, Shell, and BP can no longer hope to compete with Saudi, Iranian, or Russian companies, which now have exclusive access to reserves that can be extracted with nothing more sophisticated than nineteenth-century “nodding donkeys.” Iran, for example, claims to produce oil for only $1 a barrel. Its readily accessible reserves – second only in the Middle East to Saudi Arabia’s –will be rapidly developed once international economic sanctions are lifted.

https://www.project-syndicate.org/commentary/marginal-pricing-end-of-western-oil-producers-by-anatole-kaletsky-2015-12




RE: OPEC, for some quiet moments.. - admin - 12-31-2015

A year ago, when Anatole Kaletsky suggested that the price of oil might fall to $20 a barrel, most people laughed. The global economy was growing! Demand was picking up! Oil had been at $100 only recently!

Some people think Iran can supply $1 oil - Business Insider

Wintershall and the local state-owned energy company Gas y Petróleo del Neuquén have signed an agreement under which Wintershall will increase its interest in Argentina's Aguada Federal Block from 50% to 90%. In March 2015, Wintershall began with an own-operated exploration campaign in the block; the company has already drilled two vertical exploration wells, which are currently being tested. The exploration wells aim to provide important information about the characteristics of the crude oil and natural gas reservoir, which includes promising shale rock of the Vaca Muerta formation. Together with the U.S., Argentina is one of the most important growth regions in the field of unconventional oil and gas production. The South American country has the second-largest shale gas deposits and the fourth-largest shale oil deposits in the world.

Wintershall eyes Argentina’s Vaca Muerta shale with new investment

On the heels of the U.S. government's recent lifting of the federal ban on the export of crude oil produced in the U.S., NuStar Energy and ConocoPhillips said Wednesday that they are loading what they believe to be the nation's first export cargo of U.S.-produced light crude oil since the 40-year-old ban was lifted on Dec. 18.

ConocoPhillips to export first U.S. shale oil as it beats rivals

Russia may cut its oil-price estimate for the 2016 budget next year, possibly following other crude-exporting nations as the commodity, which makes up about 40% of the country’s budget revenue, nears 11-year lows. “We should be ready for any oil price developments—our estimates for next year are for about $40/bbl for budget calculations,” Finance Minister Anton Siluanov said Wednesday in an interview with state television Rossiya 24. His ministry will prepare proposals to review fiscal plans at the end of the first quarter “if the situation doesn’t change,” he said. The 2016 budget, signed by President Vladimir Putin earlier this month, is based on an average oil price of $50/bbl.

Russia may cut crude estimate in 2016 budget as prices plunge




RE: OPEC, for some quiet moments.. - jft310 - 12-31-2015

HOUSTON (Bloomberg) -- Cheniere Energy Inc. began production at what will become the first terminal to export natural gas from America’s shale formations, according to ING Capital LLC, which helped finance the project.

The company is receiving about 50 MMcfd of the fuel, chilling it into liquefied natural gas at the Sabine Pass terminal in Louisiana, and storing it in tanks before the first export, Richard Ennis, head of natural resources at ING, said by email on Wednesday. Ennis said he receives regular updates from the company and that he hadn’t been informed of a delay in the startup. Cheniere spokeswoman Faith Parker didn’t immediately respond to telephone and emailed requests for comment on Wednesday.

Cheniere has previously said the inaugural cargo will leave the complex in January by tanker and that UK-based BG Group Plc is contracted to take the first shipment. Sabine Pass is “on schedule,” Ennis said. “You can’t dock a ship to offtake the LNG, until you have a full ship load of LNG in the tanks, which is planned to happen in January.”

The start at Sabine Pass paves the way for other planned liquefied natural gas terminals that are projected to turn the U.S. into one of the world’s largest suppliers. The country may be capable of exporting 7.76 Bcfgd by 2019, a Bloomberg New Energy Finance analysis shows. While the U.S. has been sending gas abroad from Alaska for years, Cheniere’s cargo would mark the first to leave from the lower-48 states, a testament to surging shale supplies that have sent domestic stockpiles to record levels.

Shale Boom

Cheniere’s export terminal underscores how dramatically the shale boom has reshaped the natural gas market. Before drillers started pulling the fuel out of tight-rock formations using hydraulic fracturing and horizontal drilling, Cheniere was building import terminals in anticipation of a domestic shortage. Following the onslaught of shale gas, Cheniere started retrofitting terminals for exports.

The U.S. cargoes will mark “a paradigm shift for the industry,” Hadi Hallouche, head of liquefied natural gas trading at Trafigura Beheer BV, said by phone from Geneva.

Pipeline Nominations

The supply of natural gas scheduled to arrive at Cheniere’s Sabine Pass terminal from two pipelines for liquefaction has surged to 128,987 dekatherms as of Wednesday from just 6,720 a month ago.

Cheniere has had a rocky year, dealing with a slide in U.S. natural gas prices, the ouster of its co-founder and CEO, Charif Souki, and scrutiny from billionaire activist investor Carl Icahn. Its stock has fallen 48% this year.

With gas demand in parts of Asia weakening, U.S. suppliers are turning their attention to Europe as their primary market. BG Group spokeswoman Kim Blomley referred a request for comment on the startup to Cheniere on Wednesday.

Plants such as Sabine Pass will cool and liquefy natural gas to 1/600th of its volume for easier loading onto tankers. Cheniere plans to build at least six “trains” that produce LNG at Sabine Pass by late 2018, allowing the terminal to supply more than 3.5 Bcfgd. The project is estimated to cost at least $15 billion.


RE: OPEC, for some quiet moments.. - admin - 01-02-2016

As benchmark oil prices tumbled to new 11-year lows on Monday, a new report painted a grim picture of the outlook for energy prices next year and 2017. Scotiabank Economics said that while other commodities are set to rebound in 2016, West Texas Intermediate oil prices would average “no more than US$40-45 per barrel for 2016 and US$45-50 for 2017.”

Oil to stay below $50 for two years, while other commodities rebound, Scotiabank says | Financial Post

US banks face the prospect of tougher stress tests next year because of their exposure to oil in a sign of how the falling price of crude is transforming the outlook not just for energy companies but the financial sector. The Organisation of the Petroleum Exporting Countries on Wednesday lowered its long-term estimates for oil demand and said the price of crude would not return to the level it reached last year, at $100 a barrel, until 2040 at the earliest.

US banks hit by cheap oil as Opec warns of long-term low

Dennis Coyne, an editor and frequent contributor to this site, has suggested that we are not at peak oil. He argues that there is likely to be a dip in production starting next year but higher prices will cause things to turn around and we will surpass the 2015 peak by 2019. He commented a few days ago: If we take some of the larger producers that have been increasing output and compare with the rest of the world (ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4 percent based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed.

Peak Oil Production Is Still Years Away | OilPrice.com

As oil prices wallow near multi-year lows, it’s becoming increasingly clear that the new cartel controlling oil prices is not OPEC but world credit markets. From Saudi Arabia’s record $100 billion deficit to shale oil’s continuing reliance on cheap credit funding, it’s clear that no major oil producer or company in the world right now is economically self-sufficient based on oil revenues alone. This situation has left the flow of oil and the decision on when to stop pumping the increasingly tarnished black gold in the hands of banks rather than oil men.

The New Cartel Running The Oil Sector | OilPrice.com




RE: OPEC, for some quiet moments.. - Putncalls - 01-03-2016

'admin' pid='65649' datel Wrote:

As benchmark oil prices tumbled to new 11-year lows on Monday, a new report painted a grim picture of the outlook for energy prices next year and 2017. Scotiabank Economics said that while other commodities are set to rebound in 2016, West Texas Intermediate oil prices would average “no more than US$40-45 per barrel for 2016 and US$45-50 for 2017.”

Oil to stay below $50 for two years, while other commodities rebound, Scotiabank says | Financial Post

US banks face the prospect of tougher stress tests next year because of their exposure to oil in a sign of how the falling price of crude is transforming the outlook not just for energy companies but the financial sector. The Organisation of the Petroleum Exporting Countries on Wednesday lowered its long-term estimates for oil demand and said the price of crude would not return to the level it reached last year, at $100 a barrel, until 2040 at the earliest.

US banks hit by cheap oil as Opec warns of long-term low

Dennis Coyne, an editor and frequent contributor to this site, has suggested that we are not at peak oil. He argues that there is likely to be a dip in production starting next year but higher prices will cause things to turn around and we will surpass the 2015 peak by 2019. He commented a few days ago: If we take some of the larger producers that have been increasing output and compare with the rest of the world (ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4 percent based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed.

Peak Oil Production Is Still Years Away | OilPrice.com

As oil prices wallow near multi-year lows, it’s becoming increasingly clear that the new cartel controlling oil prices is not OPEC but world credit markets. From Saudi Arabia’s record $100 billion deficit to shale oil’s continuing reliance on cheap credit funding, it’s clear that no major oil producer or company in the world right now is economically self-sufficient based on oil revenues alone. This situation has left the flow of oil and the decision on when to stop pumping the increasingly tarnished black gold in the hands of banks rather than oil men.

The New Cartel Running The Oil Sector | OilPrice.com

I don't see how Scotiabank can predict oil prices when they are controlled by a 30 year old Suni monarch?