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RE: OPEC, for some quiet moments.. - Thylacine-2 - 01-14-2015

"When, and where, oil is too cheap to be profitable"
Those articles don't make clear that the Wood McKenzie study is only about lifting costs, and may be misleading to folks that don't understand that.


RE: OPEC, for some quiet moments.. - Putncalls - 01-14-2015

I think it should be clear at this point that the US sets the global oil price now. After that is clear it becomes clear that it's in the Saudis best interest to cede that control to the US. Latest RJ report:

https://www.dropbox.com/s/4icrkp52htnac7g/US%20determined%20prices.pdf?dl=0


RE: OPEC, for some quiet moments.. - admin - 01-14-2015

Now, as the price continues to plunge to levels not seen in almost six years, pundits are still trying to make sense of it all. And they’re mostly failing. Investors, for whatever reason, seem to be confident that a bottom is forming, as they pour cash into oil-related funds.

The start of ‘the Great American Oil Bust’ as Saudis drown shale boom - MarketWatch

The current bear market for oil is the result of a supply shock brought on by fracking. Based on the unwillingness of global oil producers to reduce production, the current supply shock will take a while to work its way through the system, and oil prices have yet to find a bottom.

Historical Oil Declines - Business Insider

This year, spending on oil-and-gas drilling could plunge by $58 billion – or 30% – from last year’s $196 billion, based on a survey of 225 companies in the sector. But it could get even worse: Barclays conducted the survey over the past four weeks, and the price of oil has continued to drop since, forcing companies to adjust to the new realities.

The Great American Oil Bust Is Only Just Beginning - Business Insider




RE: OPEC, for some quiet moments.. - admin - 01-14-2015

OPEC nations can withstand a drop in crude prices to the lowest in more than five years, while shale drillers will probably be the first to curb production amid the collapse, the United Arab Emirates’ energy minister said.

U.A.E. sees oil-price drop hurting shale drillers not OPEC

Suncor Energy has announced significant reductions to its 2015 budget and the loss of about 1,000 jobs in response to the current downdraft in oil prices. The cuts include a $1 billion decrease in the company' s capital spending program, as well as sustainable operating expense reductions of $600 million to $800 million to be phased in over two years offsetting inflation and growth.

Suncor cuts capital spending, axes 1,000 jobs on oil price

Oil extended losses to trade below $45/bbl amid speculation that U.S. crude stockpiles will increase, exacerbating a global supply glut that’s driven prices to the lowest in more than five and a half years. Futures fell as much as 4% in New York, declining for a third day. Crude inventories probably gained by 1.75 MMbbl last week

Oil drops below $45 as U.S. stockpiles seen worsening collapse




RE: OPEC, for some quiet moments.. - jft310 - 01-14-2015

CME feb oil futures contract price is down 10 cents at 7:45 AM .FWIW dept


RE: OPEC, for some quiet moments.. - admin - 01-14-2015

From the IMF (Blanchard, chief economist):

This column attempts to answer seven key questions about the oil price decline: What are the respective roles of demand and supply factors? How persistent is the supply shift likely to be? What are the effects likely to be on the global economy? What are likely to be the effects on oil importers? What are likely to be the effects on oil exporters? What are the financial implications? What should be the policy response of oil importers and exporters?

The 2014 oil price slump: Seven key questions | VOX, CEPR’s Policy Portal




RE: OPEC, for some quiet moments.. - admin - 01-15-2015

Shale oil production remains profitable as long as the price of oil exceeds marginal cost. There are indications that the initially high marginal cost of shale oil production has been declining substantially, as the shale oil industry has gained experience, but there are no reliable industry-level estimates of marginal cost.

Shale Oil Isn't Driving Down Global Oil Prices - Business Insider

the shale oil debate has largely ignored the fact that shale oil is not a perfect substitute for conventional crude oil, making comparisons across countries difficult. The quality of crude oil can be characterised mainly along two dimensions. One is the oil’s density (ranging fromlight to heavy) and is typically measured based on the American Petroleum Institute (API) gravity formula; the other is its sulphur content (with sweet referring to low-sulphur content and sour to high-sulphur content).

Shale Oil Isn't Driving Down Global Oil Prices - Business Insider

The collapse in oil prices is starting to slow growth in U.S. output, OPEC said on Thursday, although the slowdown will not prevent demand for the exporter group's oil falling in 2015 to its lowest in a decade.

OPEC to see market share drop even as oil slump slows shale boom - Yahoo Finance

ConocoPhillips Chairman and CEO Ryan Lance has told policymakers attending a briefing at the Center for Strategic and International Studies (CSIS) that the nation’s approaching surplus production of crude oil offers an opportunity for expanded global trade through exports. The U.S. could sustain the job creation and economic stimulation powered by the U.S. energy renaissance, while putting downward pressure on consumer fuel prices and improving global energy security.

ConocoPhillips CEO calls for U.S. to export surplus crude

Oil oversupply that sent prices to a five-year low will probably persist until at least the second half when demand is set to recover, according to Kuwait’s oil minister and the OPEC governor of the United Arab Emirates. Faster global economic growth will be needed to help absorb the oil surplus estimated at 1.8 MMbpd, Kuwait Oil Minister Ali Al-Omair told reporters in parliament. A demand-led recovery is seen in the second half, the U.A.E.’s Governor to OPEC Ali Al Yabhouni told reporters in Abu Dhabi.

Oil rebound seen by Gulf producers as slump spurs demand




RE: OPEC, for some quiet moments.. - jft310 - 01-15-2015

Oil futures $49.20 at 7:45 AM up 72 cents on close FWIW dept


RE: OPEC, for some quiet moments.. - admin - 01-16-2015

Brent crude oil rose more than $2 to almost $50 a barrel on Friday after the West's energy watchdog forecast the market downtrend would end, although analysts said a strong rebound soon was unlikely as global output continued to outweigh demand.

Oil jumps as IEA sees signs market 'tide will turn' | Reuters

The U.S. benchmark crude price, down more than $60 since June, is on the way to this next threshold, said Societe Generale SA and Bank of America and Goldman Sachs Group says that West Texas Intermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut.

Oil at $40, and below, gaining traction on Wall Street

Although T. Boone Pickens says he is "no fan" of the Organization of the Petroleum Exporting Countries, the current situation in oil is out of its control, he wrote during a question-and-answer session on Twitter. Instead, the billionaire oil tycoon placed the blame on the U.S., saying that the oil market is "oversupplied" by the country. In recent months, oil prices have nosedived, pressured by a glut in supply.

Oil market 'oversupplied' by US: Pickens

India, Indonesia and Mexico are all looking to reduce oil subsidies, which would raise prices there, Yergin pointed out. Meanwhile, Europe's economy is in dire shape. And "Chinese oil demand is so [strongly] linked to construction and infrastructure, and that's weakening."

Why oil is in more trouble than you think

In short, because the industry can bring new supply to market relatively quickly, we go from a spare capacity model, to a just-in-time model instead. The key consequence of that fact: the market no longer needs so great a risk premium embedded into the spot price, because supply can be delivered to the market as and when needed, without too much concern of a system-chocking shortage ever happening.

A capital contango, and why oil storage economics may be dead | FT Alphaville




RE: OPEC, for some quiet moments.. - admin - 01-18-2015

When I was on the road promoting The Power Surge in 2013, I regularly said two things: First, oil prices could easily plunge for a year or two, though it was far from certain that that would happen. Second, we would not see a repeat of 1986, when the hangover from a price crash lasted for well over a decade before high prices finally returned.

Energy, Security, and Climate » The Oil Lesson of 1986 is Wrong

U.S. production of crude oil rose to a record even as prices slumped to the lowest in more than five years and the number of rigs targeting oil decreased. Output climbed to 9.19 MMbopd last week, the most in Energy Information Administration weekly estimates going back to 1983. Strong production helped push crude inventories to a seasonal record, EIA data showed.

Oil production in U.S. keeps climbing even as prices drop

Total has started gas and condensate production from the West Franklin Phase 2 project in the Central Graben area of the UK North Sea. The project will supply 40,000 boed to the Elgin/Franklin hub. Michael Borrell, Total’s senior V.P. exploration & production, Europe and Central Asia said, “With the start-up of the West Franklin Phase 2 project, Total consolidates the production capacity of its operated Elgin/Franklin hub. The hub holds significant reserves as well as promising exploration opportunities.”

Total brings West Franklin Phase 2 on stream

U.S. drillers have taken a record number of oil rigs out of service in the past six weeks as OPEC sustains its production, sending prices below $50 a barrel. The oil rig count has fallen by 209 since Dec. 5, the steepest six-week decline since Baker Hughes Inc. (BHI) began tracking the data in July 1987.

Steepest Oil-Rig Drop Shows Shale Losing Fight to OPEC - Bloomberg