Saudi Arabia Won’t Let Oil Prices Stay Over $40

51 Comments on "Saudi Arabia Won’t Let Oil Prices Stay Over $40"

makati1 on Sun, 20th Mar 2016 7:42 pm 



I’m not sure how much Saudi Arabia actually controls oil prices today. They may be able to raise them a bit by cutting a few million barrels per day off of their production, but that to would not last for long as the consumer cannot afford high oil prices anymore.

Forbes is a propaganda rag for Wall Street. Nothing more than ads for their clients. We are watching the collapse of capitalism along with the Age of Petroleum, the world economy and the ecology that keeps us alive.

Pass the popcorn.

Northwest Resident on Sun, 20th Mar 2016 7:59 pm 



I interpret this headline and article in a major financial news source to mean that the FIX is in: Oil prices are expected to fall below $40 per barrel (again), and when they do, Saudi Arabia will be blamed.

Plantagenet on Sun, 20th Mar 2016 8:08 pm 



We’re in a global oil glut. Saudi produces so much oil, that when combined with other major producers like the USA and Russia, there is more oil on the market that can immediately be consumed. KSA could end the oil glut by cutting their oil production, but they are choosing not to do that at the present time.

The natural result of this is continued low oil prices.

Cheers!

GregT on Sun, 20th Mar 2016 8:49 pm 



The KSA is exporting less oil today, than it was in the 1980s. The big surge in production post 2008 was US unconventional oil. The stuff that is too expensive for the world’s economies to afford. Low oil prices are a result of faltering economies, US/Israeli geopolitical ‘strategies’, market manipulation, and central banker’s monetary policies.

GregT on Sun, 20th Mar 2016 8:50 pm 



Sorry, forgot to add the…..Cheers! 🙂

Boat on Sun, 20th Mar 2016 9:08 pm 



Wow GregT,

You forgot new production added by Canada, Iraq and Brazil. You did get the US right though. You surprised me.

geopressure on Sun, 20th Mar 2016 9:20 pm 



Here’s the Daily Chart for WTI…

http://finviz.com/futures_charts.ashx?t=CL&p=d1

It sure looks as though we are headed to the high $40’s pretty quickly…

look at the high volume that was required last friday just to post a down-day & keep the Chart from going exponential…

geopressure on Sun, 20th Mar 2016 9:25 pm 



This whole Saudi is trying to destroy the shale oil producers excuse is getting old…

Guys, when the negative stories about oil become really frequent & more intense… That means that the price is going up…

geopressure on Sun, 20th Mar 2016 9:28 pm 



Another thing, yall, the financial media, you should never listen to them, never… if they were really good at know what;s going on, they would not be wasting their time on CNBC or Bloomberg…

That’s just a fact…

The only people worth listening to are people from the CME… They are in the KNOW…

geopressure on Sun, 20th Mar 2016 9:42 pm 



I take that back, the guys @ the CME are in the know, but that does not mean they tell the public the truth… It’s not easy, but you knida have to learn how to gauge their reactions & listen to offhand comments… Anything the directly say is likely BS supporting their client’s positions…

nevermind, I should not have started talking about this, but if someone directly makes a purposeful statement about oil on TV, you can rest assured that it is false…

GregT on Sun, 20th Mar 2016 10:09 pm 



Boat,

“You surprised me.”

Glad to be of assistance, those dormant brain cells could use a little stimulation from time to time. Not that it’s likely to make much difference.

You can’t fix stupid.

Bloomer on Sun, 20th Mar 2016 10:58 pm 



If the oil pundits were so clever they would of predicted in 2014 when oil was still hovering around $100 a barrel that the price will soon crash and burn.

Personally I don’t have a clue where the price of oil will go from here. I do know low oil prices will help industries that are energy reliant and will stimulant the economy. Looking at past trends though it does take sometime before demand for oil perks up when oil prices are low.

Shale oil and the oil sands production has held up well, however production is starting to falter and some companies are in financial dire straits.

Overall, the oil boom bust cycle always takes time to play out. In the short term the price could fall again. In the long-term unless there are technolgical break throughs that can replace oil, it will make a come back and once again become dear and sought after.

GregT on Sun, 20th Mar 2016 11:12 pm 



In the longer term Bloomer, we have already exceeded 350 ppm CO2 in the atmosphere. The agreed upon do not exceed level for the Planet Earth to continue to support life as we know it. We are now at 403 ppm, and rising more rapidly than the scientific community thought possible.

Too much oil is our real problem, not too little.

makati1 on Sun, 20th Mar 2016 11:41 pm 



Geo, you are so deeply brainwashed that you are not worth my time to try to correct your tunnel vision. Good luck trying to survive in the soon to come collapse and decent into the 3rd world by the West in general and the Us in particular.

You have just been installed as the latest member of my “Too indoctrinated to be saved” list.

onlooker on Mon, 21st Mar 2016 12:15 am 



Yes Mak anyone who believes Business as usual can continue for too much longer is seriously deluded and I try not to waste my time with them.

twocats on Mon, 21st Mar 2016 12:20 am 



mak –

if one were to take geo at his word that he’s a blackmarketeer then I would say he could stand a fairly decent chance in a near-breakdown scenario, similar to what we see in a lot of countries now, if he good establish himself in the staple goods markets.

I have noticed geo’s been in a much better mood in the past couple weeks so there are three possibilities:

1) he does have in the money calls on oil (he’s been calling for a price spike for a while now), which I guess supports his other claims of being part of the criminal underworld

2) he’s back on his medication

3) he’s on the manic upswing of his bipolar disorder

or some combination of the three, either way, hard to say.

I just wonder, since there was never any excess supply and the SPR is almost empty etc (all according to geo’s ongoing conspiracy theory), so I guess oil is never falling back below, say $30/barrel? Are you betting money on that geo?

Harquebus on Mon, 21st Mar 2016 1:52 am 



“Despite nearly impenetrable secrecy and pervasive deception, it has become apparent that the Saudi oil fields have peaked (at a hair over 10 million barrels per day) and are beginning a slow but irreversible decline.”
http://www.dailyimpact.net/2015/12/31/the-scariest-news-story-of-2016/

rockman on Mon, 21st Mar 2016 6:06 am 



Mak – I’ll make the same point again: neither the KSA nor the Rockman determine the price we sell our oil. Never have. It really is as simple as I’ve explained before. Put yourself in the place of a business manager…any business. So you make widgets out of widget ore. Today you can sell your widgets for a profit. By paying $X per ton of widget ore. But you see a bad trend developing: your widget buyers don’t appear to be able or will to continue paying your price. As you project the trend you see that even the max price you can charge down the road will lead to a loss. So you tell your widget ore miner that you can’t pay $X/ton any longer. Likewise all the other widget makers see the same trend.

So it’s very simple: either the widget ore miners reduce their price or all the widget makers will reduce their purchases of widget ore. Making it worse is that new start up widget maker that has significantly increased the number of widget on the market even though it costs them a lot more to make widgets then you but are still profitable at $X/ton of widget ore. At first the widget ore miner says it won’t cut the price. But why would you continue making widget if you know you’re going to lose money? Same true for all the widget makers especially that high cost widget maker. So widget ore sales will plunge if the miners don’t lower prices. Which they must do because they require a certain minimum revenue to stay afloat. So the widget ore miners have no choice: lower prices and produce as much ore as possible. But even with that they still can’t generate as much revenue as when the ore was going for $X/ton. But they have no choice: they are able to max their revenue by producing as much ore as possible. And while the new widget ore price is much lower the high cost widget maker still can turn a profit so it shuts down most of its operations.

I’m not trying to patronize you but when we substitute oil for widgets some folks tend to think the business dynamics are different. They aren’t: if the makers of any product can’t sell those products for an acceptable profit they aren’t going to buy the raw materials and make that product unless the cost of that raw material is low enough.

As coined by the Clinton campaign many years ago: “It’s the economy, stupid.” LOL.

Truth Has A Liberal Bias on Mon, 21st Mar 2016 6:53 am 



Considering an IMF report concluded that KSA needs $106/barrel to balance their budget it seems unlikely they’ll put much effort into suppressing oil prices forever. According to OPEC their production is down 174,000 barrels a day from January 2016 to February 2016 (Iran up 187G per day/Iraq down 263G per day/Nigeria down 94G per day/UAE down 49G per day/KSA up 14G per day… see page 56 of link below)

http://www.opec.org/opec_web/en/publications/338.htm

Opec (excluing Indonesia) year over year
from Feb 2015 to Feb 2016 is up about 1.5 milion barrels a day and KSA is pumping every drop it can. How long thet can hod is yet to be determined but I’m guesing not much longer.

makati1 on Mon, 21st Mar 2016 7:14 am 



Truth, I doubt that they have any choice. As the newest article above points out, it is the price the consumer can afford that dictates the price of oil today. Most consumers purchasing power is shrinking daily in the Western world. Has been for at least a decade. Or don’t you consider what your dollar can actually buy as important?

Davy on Mon, 21st Mar 2016 7:15 am 



Without a healthy Chinese economy we are not likely to see much higher prices for long and sustained higher oil prices. The global financial system has deviated from its stable. Crisis is just a headline away. It has been this way for so long now it is normal. We see all markets and commodities bounce around sometimes with huge swings within a day then there are stable periods all for no reason or reasons that should matter that don’t matter. This is just a state of long term turbulence with no steady state.

We know the manipulation is extreme today and this is from the very top and down within the players. It is legalized theft and serves the purpose of those who are running the show. Normal fundamentals with proper accounting standards were left at the gate 10 years ago. Media is completely corrupted at all levels and is now nothing more snake oil salesmen. Our political process is now a circus. The whole command and control level of the global system is a casino for the connected with magic shows for the sheeples. This is a long winded description of anything is possible at this point.

There is the possibility of holding this whole status quo together for years or it could collapse tomorrow. We just don’t know because we have never seen capitalism at this point of being global and controlled as it is today. We have plenty of disenfranchisement and wealth transfer to continue. It is obvious from so many markers we are at or near the end of growth with a population far into overshoot. Per capita analysis are horrible. Our climate is dangerously bordering unstable. All ecosystem metrics are negative.

We have a global group of wealthy elites who are connected at every level within nations and from economic integration between nations. This leadership will make every effort to continue the status quo of their wealth protections, wouldn’t you? No one in their right mind would allow their property to be destroyed. Oil prices are caught in this new normal turbulence and corruption.

What we are seeing is deflation of the financial system and decay of the physical elements of our market based system. We are seeing decay at the abstracts level of social and the physical ecosystem. The question should be how long not if. How long can this destructive process proceed without a major fall in activity. Demand and supply destruction is clearly evident with widespread bad debt and malinvestment. This bad debt can never be repaid except through wealth transfer and further destruction of the public good for private profit. Debt levels are beyond healthy. The only way this can be continued is to continue the “extend and pretend” policy of rehypothecating debt and value into eternity. At some point reality steps in because the physical real process of supporting 7BIL people is the here and now real not the abstract of future wealth generation. At some point reality will meet fantasy in the final battle and we know who will win.

onlooker on Mon, 21st Mar 2016 7:22 am 



http://www.peakprosperity.com/podcast/97466/ed-butowsky-calculating-true-cost-living?utm_source=twitterfeed&utm_medium=facebook-CMdotcom&utm_campaign=Feed%3A+PeakProsperity+%28Peak+Prosperity%29&utm_content=FaceBook
And I remind those who frame the oil situation as a glut are missing the main interrelated point that $147 dollar oil crashed the economy because that simply was unaffordable to consumers and ever since prices have been going down more and yet that has hardly improved any economic factors. So you can have all the glut in the world but what does it matter if the economy is unable to be resuscitated.

marmico on Mon, 21st Mar 2016 7:43 am 



Saudi will lose the price war and come crawling back on their hands and knees to Uncle Sam soon enough.

Harquebus on Mon, 21st Mar 2016 8:10 am 



“2016 has started with a 44% collapse in China passenger car sales.”
http://www.zerohedge.com/news/2016-03-20/china-car-sales-suffer-biggest-crash-record-start-2016

ennui2 on Mon, 21st Mar 2016 8:51 am 



“$147 dollar oil crashed the economy”

The meme that will never die. (sigh)

ARM resets and the resulting CDO mess crashed the economy.

joe on Mon, 21st Mar 2016 8:51 am 



Many conventional producers are using larger portions of their own oil domestically. The global oil pricing model we think exists is disappearing in front of our noses. This is part of the problem. Interest rates are being slashed globally, China is dumping international trade and embracing domestic consumption yet the dollar glides upwards as oil prices sink as a result. Of course i will buy Saudi oil priced in dollars when the ryal buys 30cents. ‘Thats a spicy meatball’.
They can only sell oil because of the dollar, without it, their socialist budget would have vanished long ago.
This dollar strength will crush the US as well, causing a a Great Stagflation.

joe on Mon, 21st Mar 2016 9:01 am 



Sorry onlooker, oil did not collapse the US economy, the banks did that and the treasury saved it along with the FED as lenders of last resort. The problem with modern economics post communism and post industrial was that it was allowed to extract every last drop of profit and productivity from the services sector, then deregulation allowed the banks to treat these benefits like a deposit for a mortgage and they issued debt like no tomorrow, in fact this credit splurge drove demand for cheap goods from China whoes growth drove the commodities market, so oil was like the thermometer of credit.
When sub-prime blew up, everyone headed for the hills because they knew there was not a single bank who was not neck deep in bad debt.
The result?
http://www.economist.com/content/global_debt_clock

Paying this back will be a feat.

Boat on Mon, 21st Mar 2016 9:07 am 



onlooker,

“So you can have all the glut in the world but what does it matter if the economy is unable to be resuscitated”.

Imagine me disagreeing with a doomer. The world economy will be fine and has been fine. You guys are just to emotional and get stirred up by daily/monthly news. Events in individual countries can be volatile but overall this is BAU
Check out any GDP chart. While growth isn’t booming, the world GDP is chugging along.

Kenz300 on Mon, 21st Mar 2016 9:31 am 



Climate Change is real…. it will impact all of us……we need to move to clean energy production with wind and solar power and clean energy consumption with electric vehicles………

Fossil fuels are the cause of Climate Change….. we need to deal with the cause…. the world needs to move away from fossil fuels and embrace the future of wind and solar energy

Exxon’s Climate Change Cover-Up Is ‘Unparalleled Evil,’ Says Activist

http://www.huffingtonpost.com/entry/exxon-evil-bill-mckibben_561e7362e4b028dd7ea5f45f?utm_hp_ref=green&ir=Green&section=green

onlooker on Mon, 21st Mar 2016 9:37 am 



Yes Boat, in reality what we are getting is more debt, more wealth disparity and more pollution. If you and others had not noticed all this supposed chugging along as been attained via debt. This is because we have a system that no longer can function property without loans/debt and debt begets more debt as bubbles are blown up only to burst. In the meantime, is the infrastructure getting fixed? NO

is the national deficit getting paid down? NO

Will this make one iota of difference to any of the tens of millions of citizens who are struggling to make the rent and light bill? NO

Is this helping to solve the national obesity, addiction and mental health epidemics? NO

Is this helping to solve the illegal immigration troubles? NO

Will this help solve or slow climate change or help communities prepare for it? NO

Will this help solve or slow the sixth mass extinction? NO

GregT on Mon, 21st Mar 2016 9:45 am 



“ARM resets and the resulting CDO mess crashed the economy.”

Right, and 8 years later, after trillions of dollars in bail outs, and a real estate bubble blown even higher than back in ’07, and the economy still cannot recover.

Onlooker is correct. High energy costs are the root cause of the global financial crisis, and that crisis isn’t going away. Ever. Welcome to the new normal, and enjoy it while it lasts, because the next downturn is going to make the last one look like a walk in the park.

geopressure on Mon, 21st Mar 2016 9:55 am 



Harquebus:

they next month it went back up…

GregT on Mon, 21st Mar 2016 10:00 am 



Boat,

“The world economy will be fine and has been fine.”

Fuck are you ever stupid.

geopressure on Mon, 21st Mar 2016 12:15 pm 



It looks like the Government is about to ramp up a false narrative about U.S. Crude Oil Exports… This will allow Democrats to blame the coming higher fuel cost on Republicans… There goal is to take back the Senate…

I do not believe the story linked below, not one word of it:

http://www.downstreamtoday.com/news/article.aspx?a_id=51469

Look at how they describe “Condensate”… Very misleading – the whole story…

—
I predict that the EIA is about to start saying that US Production is increasing (when it is not) & they will start reporting fake exports to fit this narrative…

Ay time someone says that there are 100’s or 1000’s of drilled, uncompleted wells waiting to come online, they are lying or have been mislead…

Practicalmaina on Mon, 21st Mar 2016 2:42 pm 



Marmico,don’t those Saudis still have a massive sovereign wealth fund that probably holds stocks that you also hold? Now would be a great time for them to liquidate as I see stocks overvalued at this time. Probably would hurt the old US of A pretty badly, especially the companies the Saudis liquidate their interest in. Things are not as stable as we like to beleive here, Peabody is about to go belly up with 6 billion in debt and massive cleanup bills to be paid by you and I.
I am not saying Saudi Arabia won’t crumble, but it will be climate destruction, not financial. they are speeding their own demise by continuing the illusion of cheap plentiful fossil fuels.

ghung on Mon, 21st Mar 2016 3:29 pm 



Saudi/Shell split in Port Arthur:

http://money.cnn.com/2016/03/21/investing/saudi-arabia-largest-us-oil-refinery-port-arthur/index.html?iid=hp-stack-dom

geopressure on Mon, 21st Mar 2016 5:35 pm 



Practicalmaina: “Now would be a great time for them to liquidate”

The Saudi’s want the price of oil to go up, they can’t kill U.S. demand by crashing the stock market…

Besides, all of the Saudi Sovern Wealth Fund Holdings have been attacked by the US government over the last two years as a means of pressuring the Saudis into increasing production… Just one of many tactics employed to for countries to increase production…

Boat on Mon, 21st Mar 2016 6:57 pm 



geo,

“Ay time someone says that there are 100’s or 1000’s of drilled, uncompleted wells waiting to come online, they are lying or have been mislead”…

There are multiple sites out there that say just that. Do some research.

geopressure on Mon, 21st Mar 2016 7:12 pm 



Did you read what you quoted me as saying???

I’m telling you that those sites are lying or mislead…

—
Here, I’ll show you why:

take a look at the disclaimer at the bottom of page two here:

https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2016-03-11.pdf

The number is a meaningless fabrication…

There is simply no way in hell that there is that much idle capital tied up in wells that are not making oil…

geopressure on Mon, 21st Mar 2016 7:14 pm 



I seriously don’t think you read the statement that you quoted…

Some of you guys are very impulsive… If you would consider what other people are saying, you might have a chance of learning something…

Boat on Mon, 21st Mar 2016 7:37 pm 



geo,

http://www.oilvoice.com/n/The-current-fracklog-will-not-save-US-shale-production-at-a-30-USDbbl-WTI/d5287b85e877.aspx

GregT on Mon, 21st Mar 2016 7:38 pm 



Boat isn’t interested in learning anything Geo. He prefers to remain dumb and ignorant.

Boat on Mon, 21st Mar 2016 7:44 pm 



geo,

http://www.oilvoice.com/n/The-current-fracklog-will-not-save-US-shale-production-at-a-30-USDbbl-WTI/d5287b85e877.aspx

https://boschglobal.com/Oil_At_65_Could_Free_500000_Bopd_From_Shale_fracklog/

geopressure on Mon, 21st Mar 2016 8:09 pm 



You keep posting links to all the stuff that I just showed was Bullshit…

See the Disclaimer at the bottom of page #2:

https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2016-03-11.pdf

If you think that there are 1000’s of wells sitting out there waiting to be fracked, then you (along with many others) have been mislead…

Pot all the links you like, they are all Bullshit…

geopressure on Mon, 21st Mar 2016 8:09 pm 



*Post, not Pot

Harquebus on Mon, 21st Mar 2016 10:57 pm 



Thanks geopressure.

There is a lot of name calling in this forum.
I prefer not to call people names as I feel that I can learn something from everybody.

Cheers.

twocats on Tue, 22nd Mar 2016 12:05 am 



Geo – very good post!!! thank you.

Did everyone read that disclaimer?!

the report is straight off North Dakotas website. Lynn Helms is the Director of the state’s Department of Mineral Resources. and it states pretty freaking clearly that the DUCs are a black box.

clearly most of the reporting on this issue is misleading, and its no wonder that folks like Ron Patterson and Art Berman don’t quote DUCs that often if it’s such a sketchy number.

twocats on Tue, 22nd Mar 2016 12:18 am 



and boat, if you track OilVoice, it goes to Rystad Energy’s NASWellCube, which is comprised of data “extracted from governmental sources”, which in the case of the Bakken puts about 1,000 of the 4,000 DUCs into question.

I wonder if Texas, Eagle Ford and Permian collect real data on DUCs?

geopressure on Tue, 22nd Mar 2016 2:53 am 



I doubt it, twocats, the whole Drilled, Uncompleted number thingy is just a false narrative designed to make potential oil buyers think that the upside is limited… Just another means of discouraging buying & keeping the price of oil down…

geopressure on Tue, 22nd Mar 2016 2:57 am 



Sorta like the “Production per Rig” figures that keep going up as they stack more rigs… Most people see the EIA giving this figure so much attention & think that production is increasing…

85% of the people in the US don’t know the difference between a drilling rig & an oil well…