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Page added on April 22, 2018
Market to absorb higher oil prices, says Saudi Arabia
The global market has the capacity to absorb higher oil prices, Minister of Energy, Industry and Mineral Resources Khaled Al-Faleh has said.
Faleh’s statement at a meeting of oil producers in Jeddah on Friday came as crude hit the highest level in more than three years.
The statement drew a swift reaction from US President Donald Trump who accused OPEC of inflating prices. “Looks like OPEC is at it again,” Trump tweeted.
Oil has rebounded to over $70 a barrel, after prices crashed to as low as $26 in January 2016.
“I have not seen any impact on demand with current prices,” Faleh told reporters, ahead of a ministerial committee for OPEC and non-OPEC producers.
“Reduced energy intensity and higher productivity globally of energy input leads me to think that there is the capacity to absorb higher prices,” he said.
The ministerial committee said Friday that crude inventory levels have been reduced but were still higher than desired.
Stockpiles were at 2.83 billion barrels, down from their peak of 3.12 billion barrels two years ago, it said in a statement.
Gunning for $80bln
Analysts believe Saudi Arabia, the world’s top crude exporter, aims to see much higher oil prices to overcome its domestic financial difficulties and raise the valuation of state oil giant Aramco ahead of a planned five-percent IPO.
After prices hit $70 a barrel, the Kingdom “is thought to be unofficially gunning for $80 a barrel, with some even suggesting that it favors a return to $100 (a barrel) oil”, Stephen Brennock of PVM Oil Associates said.
“As well as helping to reduce the Saudi government balance sheet, a further spike in prices would act as a boon for the impending Aramco IPO,” Brennock said.
“This is why Saudi Arabia is keeping the supply of oil tight,” Commerzbank said.
Faleh on Friday insisted the Organization of Petroleum Exporting Countries does not have a price target for oil.
“We never have a price target … Prices are determined by the market,” said Faleh who warned against the danger of price fluctuations, saying “volatility is our enemy.”
Saudi-Russia ‘consensus’
Russia, the world’s top oil producer, on Friday gave its backing to the idea of establishing an enduring alliance for producers to continue their control of the market.
“We have created a very solid foundation for cooperation between OPEC and non-OPEC countries in the future even beyond the declaration of cooperation,” Russia Energy Minister Alexander Novak told reporters in Jeddah.
Saudi Arabia said a “consensus” was emerging for a long-term cooperation agreement.
OPEC and non-OPEC producers struck a deal in late 2016 to trim production by 1.8 million barrels per day to reduce a global glut that sent prices crashing.
The deal, which is due to run out at the end of this year, has helped boost oil prices to above $70 a barrel from below $30 in early 2016.
The recovery has also been fueled by geopolitical tensions, Trump’s threat to reimpose sanctions on Iran and production problems in Venezuela, Nigeria and Libya. — With inputs from AFP
85 Comments on "Market to absorb higher oil prices, says Saudi Arabia"
Davy on Sun, 22nd Apr 2018 1:54 pm
“Without energy, there can be no growth. Confidence does not generate energy, and it does not generate growth.”
No shit Sherlock, where did I say confidence generates energy, becuase I didn’t. Confidence most certainly is a component of growth.
“The economy is still in recovery, therefore, it has still not recovered yet“
Greggie, the economy most certainly recovered from the near Minsky moment “almost collapse” or we would not be here. Your assertion is dead wrong and par for your put put golf course.
Give it up greggie. You just tasted crow. Wait until billy 3rd world gets up and you guys can circle jerk your emotionally disturbed agenda.
Davy on Sun, 22nd Apr 2018 2:01 pm
“The number of barrels of oil are irrelevant. It is the nominal cost per barrel (affordability), and the amount of energy available to our economies, that matter.“
Irrelevant???? Hardly. Is affordability and net energy important, sure.
MASTERMIND on Sun, 22nd Apr 2018 2:10 pm
Davy
The economy didn’t recover. I showed you the statistics. Math is not debatable.
MASTERMIND on Sun, 22nd Apr 2018 2:15 pm
In honor of Earth Day
Conservatives purposely making pickup trucks spew black smoke
http://www.digitaljournal.com/news/environment/conservatives-purposely-making-pickup-trucks-spew-black-smoke/article/388821#ixzz5DQk4Ky4t
MASTERMIND on Sun, 22nd Apr 2018 2:24 pm
$3 gasoline is coming soon as demand jumps and crude oil prices rise
https://www.cnbc.com/amp/2018/04/18/3-gasoline-is-coming-soon-as-demand-jumps-and-crude-oil-prices-rise.html
Davy on Sun, 22nd Apr 2018 2:28 pm
Mm, the economy recovered off the 08 low. We have not dropped bellow the 08 low so it has recovered. It has not recovered above 07 high on some metrics and others it has. Stick with high school chemistry, your math works better there.
GregT on Sun, 22nd Apr 2018 2:40 pm
“Greggie, the economy most certainly recovered from the near Minsky moment “almost collapse” or we would not be here.”
4.3 Trillion in tax-payers’ dollars spent on bailing out the TBTF banks, which BTW, were the root cause of the GFC. QE1, QE2, QE to infinity, TARP, ZIRP, and every other tool in the central bank e-CON-omists’ tool pouch, did not, have not, and will not ever, allow the world’s economies to recover from the energy crunch in ’08. It’s all a continuous series of steps down from here.
“Give it up greggie. You just tasted crow. Wait until billy 3rd world gets up and you guys can circle jerk your emotionally disturbed agenda.”
More like listening to your usual emotional crow Davy, and my only agenda is the truth. I could care less about little pieces of fabric with bright colours painted on them. That would be your self admitted ‘agenda’.
MASTERMIND on Sun, 22nd Apr 2018 2:44 pm
Get em Greg..And look at my chart of US GDP minus federal debt
https://imgur.com/a/pYxKa
MASTERMIND on Sun, 22nd Apr 2018 2:48 pm
Greg
They didn’t bail out the TBTF. They used socialism to save them. And called it a bail out to misdirect and confuse everyone…Irony the capitalist corporations haven to resort to using socialism to save them from bankruptcy! Stalin is laughing in his grave!
GregT on Sun, 22nd Apr 2018 2:48 pm
One more time, for the extremely dense, and emotionally driven:
Updates on the US Economy
20/04/18 12:40 PM
“We need to remember that despite the stellar statistics, the United States (and the rest of the world, for that matter) is still in recovery mode after the 2008 global economic crisis.”
IOW, still have not recovered.
https://superforex.com/economy-articles/updates-on-the-us-economy/?x=FORUMS
Anonymouse1 on Sun, 22nd Apr 2018 2:49 pm
What do you know about stats Boatietard? You cant even do basic math, at the fingers and toes level. Hell, you are barely literate, or even legible most times.
GregT on Sun, 22nd Apr 2018 2:50 pm
“They didn’t bail out the TBTF. They used socialism to save them.”
Completely agree. And they also killed what used to be known as a ‘free market economy’.
MASTERMIND on Sun, 22nd Apr 2018 2:53 pm
Davy
what the hell is going on with your Governor? Charged with a few felonies I hear? And he was former Navy seal..what a bad ass I bet your stupid voters thought! He will protect us all from those evil libs who want to take our guns away! LOL
Davy on Sun, 22nd Apr 2018 3:04 pm
Sorry greggie the truth alludes you becuase your emotional attachments blind you from the truth. You are lost in a different time. We are in a new normal with plenty of growth and debt. There may not be a future for our kids but it is growth and there is plenty of it. Lots of malinvestment too. But you are flat wrong what we have now is nothing but steps down. Those steps may be gone down tomorrow but as of today we are in aggregate growth.
As for you most recent comment you are contradicting yourself. I thought you said there is no recovery and your reference mentions recovery mode. What is it
Greggie, are you confused? Plus, I love your reference: https://superforex.com. Did you find that on the hedge? Did Tyler recommend it? LMFAO. Give it up greggie. If you didn’t spend so much time pricking you would be up on such things.
Davy on Sun, 22nd Apr 2018 3:05 pm
Shut up weasel, boat says thing. All you talk about is Jew Baiting and anti-American poetry. What a dumbass in motion.
Davy on Sun, 22nd Apr 2018 3:09 pm
Master baiter, who cares about Missouri’s governor, geeze. Are you bored? Is greggie’s pricking rubbing off on you. Move up to Canada I bet they would love to have another liberal snowflake.
Anonymouse1 on Sun, 22nd Apr 2018 3:21 pm
You can stop having make-believe ‘arguments’ with the sock, exceptionlist. It makes you look, even more insane, if that is even possible at this point.
Boat on Sun, 22nd Apr 2018 3:22 pm
When the US kicked ass in WWII the economy was around 2 trillion. Today it is around 20 Trillion. Cry me a river and scream doom. Even in the great depression there was 70 percent employment. That’s not doom to me.
Doom is third world countries building out of 5 gal buckets instead of a pumper truck. Doom is digging a ditch instead of renting an excavator. Doom is hiring it done instead of doing it yourself.
Bottom line, tech has eliminated most of doom if your smart enough to use it. You younger pussies that can’t use your hands to make a living may be doomed but a normal person will be fine in any economy.
MASTERMIND on Sun, 22nd Apr 2018 3:23 pm
Davy
I might be a snowflake but I am an Armed Snowflake! And my mommy and daddy didn’t give me a farm like you!
Boat on Sun, 22nd Apr 2018 3:25 pm
Amouse,
That would be you and mm, the abnormal children.
Anonymouse1 on Sun, 22nd Apr 2018 3:32 pm
You forgot to add how ‘we’ kicked ass in WWII, wetard. You know, how you and your inbred cousin, the exceptionalist like to tack yourselves onto such events on a regular basis. Don’t want the both of you to feel left out of that whole WWII ask ‘kicken’ thing now do you?
Davy on Sun, 22nd Apr 2018 3:34 pm
weasel, how does it feel when boat has more intelligent comments than you do? He knows energy you know Jew baiting, big difference. We know how much you know about energy. What’s up with you calling Rockman, narrativeman. WTF is a narrative man? Is that a special anti-American poetry attempt at a rhyme? Rockman knows energy, so, is it jealousy because you are energy illiterate. The depth of your energy literacy is mistaking the Canadian oil sands for American oil sands. What a dumbass. You must be upset with your mom because she failed with home schooling.
Davy on Sun, 22nd Apr 2018 3:36 pm
weasel, we want to talk energy here not Nazism. It surprises me you are not buddy buddy with the nedernazi. You both are nazi types. The both of you Jew bait constantly. You are both slimballs. Why don’t you swap spit with the Nedernazi?
MASTERMIND on Sun, 22nd Apr 2018 3:39 pm
Boat
Three decades ago, a revolution occurred in the world economy. Today, we’re living through its extensive political consequences. This revolution consisted of financialization. Financial services, from banks and hedge funds to trading houses, became the largest industry in the U.S. The impact of this revolution has been incalculable. Accompanied by the rapid enrichment of a tiny few and stagnation and disappointment for many more. Now the only growth that remains is selling expensive services to each other. The financial revolution has no solution for stagnant wages, income inequality and job insecurity.
https://www.bloomberg.com/view/articles/2017-12-11/must-reads-of-2017-how-finance-ate-everything
IMF declares (FIRE) finance, insurance and real estate sector a growth killer
https://www.macrobusiness.com.au/2015/05/imf-declares-fire-sector-growth-killer/
US economic growth (GDP) since 2000 is all an illusion
https://nypost.com/2014/11/06/us-economic-growth-is-all-an-illusion/
Hey Boat…Why hasn’t median income increased since 2000? In the past fifty years the median income rose a line with GDP?
https://imgur.com/a/pYxKa
MASTERMIND on Sun, 22nd Apr 2018 3:53 pm
World Bank recommends that countries eliminate minimum wage, dismantle worker protections
https://www.theguardian.com/money/2018/apr/20/world-bank-fewer-regulations-protecting-workers
They can continue making that point when we are breaking down their doors, and finish making it on the gallows.
Let the streets run with their blood. It can be cleaned up with their Brooks Brothers suits.
Boat on Sun, 22nd Apr 2018 4:01 pm
Mm
Three decades ago? In 1800 83 percent of the work force in the US were farmers. Most were poor and skinny. Today that number is closer to 2 percent.
The amount of product produced is much higher. You worry to much about median income while even you can find cheap food. Fat people seem to have the lowest paying jobs but have plenty of money to gain weight. You don’t know real economics. lol
MASTERMIND on Sun, 22nd Apr 2018 4:14 pm
Boat
From 2007 to 2016, US productivity grew at about 1 percent—a historic low
https://www.bls.gov/opub/ted/2017/labor-productivity-growth-since-the-great-recession.htm
Fat people are fat because they eat unhealthy food because its much cheaper. Whats cheaper pizza rolls and Doritos’s? Or sushi and salads? That is why the south is the most obese region in America. Because its the most poor.
MASTERMIND on Sun, 22nd Apr 2018 4:16 pm
Boat
I know what the percentage of farmers there are in the world. That is why when the oil shortage hits in a few. Its going to make one hell of a Malthusian Trap! And there is no way to prepare for what is coming..Sometimes in life there is nothing you can do to prepare. Like driving your car off a cliff..
MASTERMIND on Sun, 22nd Apr 2018 4:56 pm
Sometimes people don’t want to hear the truth because they don’t want their illusions destroyed.
-Nietzsche
MASTERMIND on Sun, 22nd Apr 2018 5:37 pm
Oil Is Fast Approaching $70. Is the Economy Ready for It?
If crude continues to move higher, it could begin to stifle economic growth
Oil prices are headed toward $70 a barrel, a weight on the U.S. economy that is bearable for now but could pose trouble if prices keep climbing.
The last time U.S. oil prices were at $70, in 2014, they were in the middle of a steep collapse. Many investors believed then that prices would soon stabilize, or even recover. Instead, they continued to plunge, eventually hitting a bottom in 2016 at $26. That tumble caused acute pain for oil producers, whose troubles rippled out into stocks, bonds and the broader economy.
This year’s rally is a sign of how much has changed in a few years. Global growth has picked up, while U.S. unemployment has fallen. A gambit by the world’s largest oil producers to cut production has been succeeding in eliminating a massive glut, with help from soaring demand.
Oil prices have climbed more than 60% since last summer’s lows, and U.S. producers are exporting more crude than ever.
U.S. crude-oil futures, front-month contract Source: WSJ Market Data Group .a barrel 2014 ’15 ’16 ’17 ’18 20 30 40 50 60 70 80 90 100 110 $120 For now, some investors say oil prices are lodged in a range that could benefit the U.S. economy by bolstering the recovering energy industry without curtailing demand.
Yet even with the economy chugging along, rising oil prices dredge up fresh concerns. If crude continues to move higher, it could begin to stifle economic growth. Higher consumer prices for gasoline and other energy products act like a tax, while pushing inflation higher and increasing pressure on the Federal Reserve to raise interest rates more aggressively.
That, in turn, could slow growth and weigh on the stock market, which has already been knocked around by trade tensions, rising bond yields and recent bouts of volatility. Inflation concerns pushed the yield on the 10-year Treasury note to the highest since 2014 on Friday, while major U.S. stock indexes closed lower, wiping out much of the recent gains after a string of upbeat earnings.
“Nothing can suck cash flow out of the economy faster than rising oil prices,” said Joseph LaVorgna, chief economist for the Americas at Natixis .
When oil prices fell below $40 a barrel, financial distress from the energy sector started to spread, said Jason Thomas, director of research at the Carlyle Group .
But if oil prices continue rising, they could boost inflation expectations, which would raise bond yields and the cost of financing.
“We’re starting to move out of that Goldilocks zone,” Mr. Thomas said. “Certainly $10 to $15 a barrel more there starts to be this drag.”
President Donald Trump tweeted Friday that oil prices are “artificially Very High!”—a sentiment that would have been unthinkable even a few months ago. Oil prices tumbled after his comment, but recovered to settle at $68.38 a barrel Friday.
A major force behind rising oil prices has been a policy reversal from the Organization of the Petroleum Exporting Countries. In 2014, the group opted to continue pumping oil at high rates in an effort to protect its market share against encroaching U.S. shale producers. Two years later, OPEC reversed course, enlisting other major producers such as Russia in a coordinated production cut that has helped to nearly eliminate a supply overhang.
Going, Going, Gone The world’s glut of stored oil has quickly disappeared
“The conversation is changing,” said Antoine Halff, senior research scholar at Columbia University’s Center on Global Energy Policy. “A year ago the conversation was ‘lower for longer’ and the ‘age of abundance’” for oil, he said. Now, “the idea of cheap oil forever is being challenged.”
A booming global economy has also been key, keeping demand high as excess oil and fuel gets soaked up by consumers around the world. The first quarter was likely the strongest for global oil demand growth, year over year, since the fourth quarter of 2010, Goldman Sachs said.
Demand has remained strong even as oil and fuel prices have been rising, and many analysts believe that prices still aren’t high enough to prompt big changes in behavior.
And with the U.S. now on track to overtake Russia as the world’s largest oil producer, a large swath of the U.S. economy stands to benefit from higher prices. Oil prices are even higher abroad, which has made it lucrative for U.S. producers to ship more crude overseas. Brent, the global benchmark, climbed to $74.06 a barrel Friday.
“In the past, any time oil prices have gone up it was as a result of supply constraints and the U.S. was at the mercy of foreign oil,” said Joseph Tanious, senior investment strategist at Bessemer Trust. “But U.S. oil production has picked up in a meaningful way—there could be also some benefits to having modestly rising oil prices.”
Oil’s rise has started to lift energy companies’ share prices, which had been slow to react to higher prices. Oil-and-gas companies have taken over as the U.S. stock market’s priciest segment, according to Credit Suisse analysts. Energy shares have gained 1.5% so far this year after a nearly 10% gain over the past month.
But even some producers worry about what will happen if higher oil prices stick around too long.
“We’re going to lose demand. It’s going to move more toward alternative energy,” Scott Sheffield, chairman of Pioneer Natural Resources Co., said at an energy conference last week. “I don’t think it does anybody any good to see $70, $80 crude.”
Write to Stephanie Yang at stephanie.yang@wsj.com and Alison Sider at alison.sider@wsj.com
https://www.wsj.com/articles/oil-is-fast-approaching-70-is-the-economy-ready-for-it-1524394800?mod=e2twe
GregT on Sun, 22nd Apr 2018 9:02 pm
“Did you find that on the hedge? Did Tyler recommend it? LMFAO. Give it up greggie. If you didn’t spend so much time pricking you would be up on such things.”
I’ve come to the conclusion Davy, that not only are you both emotionally and psychologically challenged, you are an absolute moron.
makati1 on Sun, 22nd Apr 2018 9:20 pm
Davy, MM and Boat seem to share the same inbred genes, I think. Not a rational, educated, intelligent comment from any of the three ever. So narrow minded/brainwashed that the real world does not exist for them. I would like to be there when that 4×4 of reality smacks them in the face, just to say “I told you so!”. LOL
Cloggie on Sun, 22nd Apr 2018 10:38 pm
“Davy, MM and Boat seem to share the same inbred genes, I think. Not a rational, educated, intelligent comment from any of the three ever.”
The board’s self-styled “exceptionalists”, another word for “getting my ass kicked soon”. Juvenile, arrogant, lying, name callers, shallow like a soup plate, think they are entitled to own any country, willing to cover up for any crime originating from Washington and hybris, especially from millimind (“yes it was a false flag, but hey, it works”). It is a tumor that soon will be cut out by the rest of the planet, including those Americans who have enough of Washington… and America.
https://youtu.be/T-Hqz0h6mZ8
GregT on Mon, 23rd Apr 2018 1:16 am
“When the US kicked ass in WWII the economy was around 2 trillion.”
Proof, that there are alternate universes.
BobInget on Mon, 23rd Apr 2018 2:59 pm
https://www.investorvillage.com/groups.asp?mb=19168&mn=142277&pt=msg&mid=18221385
That so called ‘glut’ is so over.
Europe taking most of US’s (foolish) oil exports.
(spread moved to $6.13)
http://www.livecharts.co.uk/MarketCharts/brent.php
I’ll repeat last week’s prediction:
Draws (on storage) will continue, when historically
we should be building inventory.
Bottom line: $100+ crude, economy killing gasoline prices by August.
Saudi Arabia and Russia have well orkestrated
our next depression.