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Page added on October 4, 2015
Saudi Arabia Cuts Oil Prices Amid OPEC Price War
Saudi Arabia on Sunday made deep reductions to the prices it charges for its oil, hard on the heels of cuts last month by rival producers in the Gulf.
With U.S. production still increasing despite lower oil prices, members of the Organization of the Petroleum Exporting Countries are battling to keep their share of the last growing markets in Asia.
In a list of official prices sent to customers, state-oil company Saudi Aramco cut the price of its light-crude deliveries to Asia by $1.7 a barrel. As a result, it switched to a discount of $1.6 a barrel against the rival Dubai benchmark from a premium of 10 cents a barrel previously. The company also cut its prices for heavy oil by $2 a barrel to the Far East and by 30 cents a barrel to the U.S.
The move come as Iran, Iraq and other countries in the Middie East made deeper cuts in their official prices than Saudi Arabia last month.
Saudi Arabia has vowed to keep pumping at high levels as it hopes lower oil prices will stimulate Asian demand and hit rival production in the U.S. that is expensive to produce. But while Chinese economic growth is slowing, U.S. production rose by about 68,000 barrels a day in July, according to the U.S. Energy Information Administration.
32 Comments on "Saudi Arabia Cuts Oil Prices Amid OPEC Price War"
joe on Sun, 4th Oct 2015 10:49 am
So its sunni oil -v- shia oil? Great. I’ll just drive my 4ltr VW suv 500 yards to Walmart!
rockman on Sun, 4th Oct 2015 11:57 am
“With U.S. production still increasing despite lower oil prices…” Lies, lies and more lies. Every reporting agency, including the most cornucopian. is reporting decreased US oil production. Primarily the shales plays, The play that have seen more than a 50% reduction in drilling activity
MrNoItAll on Sun, 4th Oct 2015 1:19 pm
“OPEC price war” is a bullshit meme invented to obscure the real reason that American shale producers are losing their collective ass.
Here’s another one:
“The U.S. producers are the only ones doing their part to reduce the global glut”
ROFL!! Shale producers aren’t producing less because their junk bond financing is drying up. Nooooo. They are voluntarily “doing their part to reduce the global glut.” hahahaha
Read all about it — you gotta laugh at crap like:
http://davidstockmanscontracorner.com/oil-bulls-lose-faith-in-recovery-as-russia-adds-to-global-glut/
BC on Sun, 4th Oct 2015 2:33 pm
Saudi Arabia’s (KSA) oil production per capita is down 15-16% since 2005 and at the level of the mid- to late 1990s per capita, a similar decline as occurred in the US in the mid-1980s following US peak oil production per capita in 1970 and the onset of US deindustrialization and financialization.
http://www.tradingeconomics.com/saudi-arabia/gdp-per-capita
http://www.tradingeconomics.com/saudi-arabia/gdp-per-capita-ppp
http://www.tradingeconomics.com/saudi-arabia/fiscal-expenditure
Now the KSA is running a fiscal deficit of ~20% of GDP to grow gov’t spending 10-11%/year, fight oil wars, prevent GDP per capita from contracting, and to avoid social unrest.
Lookin’ good.
shortonoil on Sun, 4th Oct 2015 3:27 pm
“Lies, lies and more lies.”
It’s probably what the author read in Forbes.
Shiblee on Sun, 4th Oct 2015 3:52 pm
Joe. For God sake stop calling Saudis and Gulf States Sunni they are not Sunnis they are Wahhabis consist only 3% of total Muslim World population.
John on Sun, 4th Oct 2015 4:25 pm
U.S. oil production is DOWN 500,000 barrels per day since June/July. Depletion rates for oil shale wells is over 50% per year! U.S. production will fall off a cliff!
Mohsen Samii on Sun, 4th Oct 2015 5:33 pm
It only means one thing and that is the coffers of Saudi Arabia is bleeding and they have no real alternative but to dump oil on the market at any price in order to meet their expenses and hoping for better days to come .. as far as better days is concerned they will have to look through the opposite end of the telescope where they hope to find a light at the end of a long tunnel and I hope it will not be the express train´s front lights traveling from France to England.
Whooph on Sun, 4th Oct 2015 5:38 pm
Russian airstrikes on groups the Saudis back – Saudis response lower the price of oil – Hit Russia in the pocket book – look for more cuts in the near future if Russia does not change their position.
gary on Sun, 4th Oct 2015 6:43 pm
The only number that matters to us,the amount saudi is exporting,that # keeps droping,their production rate is staying the same,but they are using their own oil in the 5 new refineries that just came on line this year
thinkingman on Sun, 4th Oct 2015 6:48 pm
“Primarily the shales plays, The play that have seen more than a 50% reduction in drilling activity”
Drilling activity and production are not always causal activities. Drilling activity spiked downward as early as January of this year. However, US producers had capped over 5k wells. 5k. They are just waiting for prices to go back up to bring those online.
Boat on Sun, 4th Oct 2015 7:31 pm
thinkingman,
you got a link on those capped wells?
Actually Sept 2014 drilling rigs topped out at 1,930 today at 883.
Since oil is a world market is it wise to know about international activity as well.
World wide rigs topped out at 3,736 now down to 2226.
People focus to much on the states when more than 1/2 of the rigs pulled from drilling are worldwide.
makati1 on Sun, 4th Oct 2015 8:16 pm
WSJ, the pimp for Wall Street. “You can have my pretty sister if you buy more shares of XYZ.”
Whooph, I think I read several places that Russia can produce at about $5 per barrel because it is produced with ruble costing, not dollars. And Russia is still buying gold, so they are not hurting too bad. I don’t think it will change anything in the ME except that they will have to cash in more USTs to pay the bills. Not good for the US.
I hear the Limbo music again. How low can it go? LOL
Autry Loy on Sun, 4th Oct 2015 8:28 pm
,, Thank God for the oil Boom here in the USA. Amarican oil has made the oil people rich over what was never a limited quanity of from the beginning. The president would not care if oil was Ten dollars a gallon, But bring it on people I hope they taake oil to 35cents a gallon again like it was when I first started buying it,,EXCUSE ME 27 cents,,And see I am not even 60 years old,,,,,,,,,,,,,,
Autry Loy on Sun, 4th Oct 2015 8:30 pm
,, Thank God for the saudi’s oil Boom here in the USA. American oil has made the oil people rich over what was never a limited quanity of oil from the beginning. The president would not care if oil was Ten dollars a gallon, But bring it on people I hope they take oil to 35 cents a gallon again like it was when I first started buying it,,EXCUSE ME 27 cents,,And see I am not even 60 years old,,,,,,,,,,,,,,
apneaman on Sun, 4th Oct 2015 8:31 pm
Welcome to the Sunday night RETARD show at peakoil.com
Chris on Sun, 4th Oct 2015 8:35 pm
So that means gas prices should go below the current $1.99 due to impending collapse of oil prices.
BC on Sun, 4th Oct 2015 8:48 pm
apnea, marmico scheduled for the closing act for the show? I scalped my tickets, so I plan to miss it. 😀
Chris, I think there is an even chance or better that wholesale gasoline touches, or dips below, a buck for the season. But what do I know . . . ? 😉
adecinvestor on Sun, 4th Oct 2015 10:33 pm
I agree the the previous posts. This article is nothing but “lies, lies, and more lies”. It is probably published to serve the agenda of some financial groups who have their best interests in seeing the oil price down. Shame.
tita on Mon, 5th Oct 2015 6:03 am
“With U.S. production still increasing despite lower oil prices”
” U.S. production rose by about 68,000 barrels a day in July, according to the U.S. Energy Information Administration.”
How to diguise a lie by telling a bit of a truth. Yes, in July, production rose… thanks to the GOM erasing the decrease in shale oil. But we know that it is on a decreasing slope.
But this is old news. We knew it was going to happen. Now, the focus may be on the drilling rigs. Last week, 26 less… is it a coincidence of various drilling schedule, or another wave due to happen because of drying cash? We can’t draw conclusions just on a one-week number. Just like we can’t draw conclusions on US production just on a one month stat. Wait and see.
makati1 on Mon, 5th Oct 2015 6:37 am
tita, the US economy is going to end fraking, not how much oil is available to frak.
shortonoil on Mon, 5th Oct 2015 7:26 am
“I agree the the previous posts. This article is nothing but “lies, lies, and more lies”. It is probably published to serve the agenda of some financial groups who have their best interests in seeing the oil price down. Shame.”
The market is not buying it, WTI is $45.97 this morning. This price cut by the Saudis was priced in over a month ago by the market. They apparently expected it. This is just a bunch of journalists that don’t have a clue as to what is actually happening, and are looking for something to crow about! They get paid by the word!
http://www.thehillsgroup.org/
dave on Mon, 5th Oct 2015 8:38 am
Producers need to set their selling price and incrementally adjust their selling price quarterly or semi annually.
BobInget on Mon, 5th Oct 2015 8:41 am
” I’m tracking lower 48 states production and it will slip by 800000 barrels/day by December and over 1 MM barrels/day by March 2016.
David W. Morris on Mon, 5th Oct 2015 9:11 am
The Saudis are in big trouble. In 10 to 15 years solar cells will be so cheap that oil will be $3 a barrel. Look at the price of TVs in the last 10 years and all electronics. The only thing the Saudis can do is slow the trend down. There will be a blood bath in all the oil exporting nations when they are unable to buy off the population.
dn32844 on Mon, 5th Oct 2015 9:36 am
No matter how much they cut their price. By the time greedy bastards running oil companies in this country decide to cut one penny,price of oil starts going up again. Greed is a disease that won’t let go of its prey until its has completely destroyed it.
Doug Hackford on Mon, 5th Oct 2015 9:44 am
we need the oil field jobs hear in the us
shortonoil on Mon, 5th Oct 2015 9:45 am
“In 10 to 15 years solar cells will be so cheap that oil will be $3 a barrel.”
The average conventional well is in the area of 4,000 feet, and average water cut is about 47%. Average lifting cost is somewhere in the vicinity of $20 to $25/ barrel. When producers can no longer make lifting cost wells are shut-in. At $3/ barrel the industry has long gone totally bust.
http://www.thehillsgroup.org/
makati1 on Mon, 5th Oct 2015 9:56 am
David, in 10-15 years the solar cells will be useless. No converters. No light bulbs. No need.
SLAVE2CHANGE on Mon, 5th Oct 2015 11:24 am
After reading the variety of theories regarding Saudi Arabia, OPEC and world oil I can inform those who are blind to the real facts…. As far back as 2009 Arabia was already hinting at how Fracking would hurt oil prices in the future and they had a plan to over supply and drop prices regardless of loss of profits. “We can afford it.”
GregT on Mon, 5th Oct 2015 11:31 am
“As far back as 2009 Arabia was already hinting at how Fracking would hurt oil prices in the future and they had a plan to over supply and drop prices regardless of loss of profits.”
This takes the cake for the dumbest comment of the day. 🙂
Kenz300 on Wed, 7th Oct 2015 9:52 am
KSA selling the only product they have……..
Even they will have to diversify in the future if they want to survive…….
Solar Surges in the Middle East and North Africa – Renewable Energy World
http://www.renewableenergyworld.com/articles/2015/09/solar-surges-in-the-middle-east-and-north-africa.html