[Plantagenet]

$this->bbcode_second_pass_quote('Subjectivist', 'S')audi Arabia, Russia, Quatar and Venezuela have pledged to freeze their production rates at January 2016 levels and not increase their exports. There is some reporter type analysis I skipped over in the quote, you can find it at the link below.

$this->bbcode_second_pass_quote('', 'T')he deal to fix production at January levels will be "adequate" and Saudi Arabia still wants to meet the demand of its customers, Oil Minister Ali Al-Naimi said in Doha after talks with Russian Energy Minster Alexander Novak. Qatar and Venezuela also agreed to participate, Al-Naimi said. Oil pared gains in London, after rising before the meeting amid speculation the countries would discuss production cuts.

"This is an announcement of a production freeze among countries whose production didn't even grow recently," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "If Iran and Iraq are not a part of the agreement, it's not worth much — and even then there is still a question of compliance."

"A freeze would not create an immediate U-turn, but it creates a better foundation for the price recovery in the second half," Olivier Jakob, managing director of consultant Petromatrix GmBh, said in a note to clients before the meeting concluded.

The freeze deal comes after months of competition for market share between Russia and Saudi Arabia. Riyadh has taken the rare step of selling crude into Moscow's backyard of eastern European, while Russia overtook Saudi Arabia in oil exports into China. The two nations are also backing opposite sides in the Syrian civil war.

According to the IEA, Saudi Arabia produced 10.2 million barrels a day in January, below the most recent peak of 10.5 million barrels a day set in June 2015. Russia produced nearly 10.9 million barrels a day in the same month, a post-Soviet record, according to official data. Venezuela pumped 2.4 million barrels a day and Qatar produced 680,000, according to the IEA.

Qatar will lead monitoring of the output freeze agreement, the nation's Energy Minister Mohammad bin Saleh al-Sada said at a news briefing. Low oil prices haven't been positive for the world, he said.

[ennui2]

Time to bump this thread. There was discussion about whether anyone in the oil patch from the embargo days was still around now, and this article interviews one who was at least around when it lifted and there was the glut in the 80s. He predicts the glut lasting 7-10 years. If that's the case, it will be a very long haul for peakers to wait around for validation.

http://www.reuters.com/article/us-ceraw ... SKCN0VV0O2


$this->bbcode_second_pass_quote('', '
')Sheikh Ali estimated it will take seven to 10 years to emerge from the current slump. "The idea that U.S. companies are going to collapse and therefore their production is going to zero is daydreaming," he said. "Even the wells that have closed can easily re-open."

[Shaved Monkey]

The russians seem confident the glut wont last long.
Russia invests $500 million in Venezuela's Orinoco before oil hits $200
$this->bbcode_second_pass_quote('', 'O')il prices to hit $200

Noteworthy, President of Ecuador, Rafael Correa, said that oil prices may sore up to $200 per barrel because of the termination of investment in the oil sector and the closure of drilling rigs due to their unprofitability against the backdrop of low oil prices

[ennui2]

So you think the last remaining vestige of Pravda (the USSR propaganda outlet) carries more weight than Reuters?

That's cherry-picking for you.

[Tanada]

$this->bbcode_second_pass_quote('ennui2', 'T')ime to bump this thread. There was discussion about whether anyone in the oil patch from the embargo days was still around now, and this article interviews one who was at least around when it lifted and there was the glut in the 80s. He predicts the glut lasting 7-10 years. If that's the case, it will be a very long haul for peakers to wait around for validation.

http://www.reuters.com/article/us-ceraw ... SKCN0VV0O2


$this->bbcode_second_pass_quote('', '
')Sheikh Ali estimated it will take seven to 10 years to emerge from the current slump. "The idea that U.S. companies are going to collapse and therefore their production is going to zero is daydreaming," he said. "Even the wells that have closed can easily re-open."

[ennui2]

I'm not saying he's right, but there's a constant appealing for authority in these debates, and he's an authority. People can then turn around and accuse him of lying or being clueless, but that's how these debates go. Appeal to authority when they say things that buttress your argument and find ways to disregard what authorities say when they conflict with your argument.

[Tanada]

$this->bbcode_second_pass_quote('ennui2', 'I')'m not saying he's right, but there's a constant appealing for authority in these debates, and he's an authority. People can then turn around and accuse him of lying or being clueless, but that's how these debates go. Appeal to authority when they say things that buttress your argument and find ways to disregard what authorities say when they conflict with your argument.

[Plantagenet]

There are several ways the oil glut might end sooner rather than later:

1. OPEC2.0: The most obvious way for the oil glut to end is for KSA to change policies and throttle back on their oil exports and go back to being the swing producer within OPEC. All KSA has to do is unilaterally cut oil production by ca. 2 million bbls/day and the oil market will go back into balance, and oil prices will start to go up again.

2. Black Swan: a terror attack or a nasty little war in the ME could destroy oil infrastructure or export facilities in the ME.

3. Economic Growth: Lower oil prices triggers off more rapid GDP growth and higher oil consumption.

4. Peak Oil: Ghawar oil production in KSA could peak and begin to drop rapidly by 7-10% per year, or aging Soviet-era oil fields in Russia could see their production collapse and Russia oil production could quickly drop, eventually moving the oil market into balance.

[AdamB]

$this->bbcode_second_pass_quote('Shaved Monkey', 'T')he russians seem confident the glut wont last long.
Russia invests $500 million in Venezuela's Orinoco before oil hits $200
$this->bbcode_second_pass_quote('', 'O')il prices to hit $200

Noteworthy, President of Ecuador, Rafael Correa, said that oil prices may sore up to $200 per barrel because of the termination of investment in the oil sector and the closure of drilling rigs due to their unprofitability against the backdrop of low oil prices

[Plantagenet]

$this->bbcode_second_pass_quote('pstarr', 'S')A peaked in 2005. There is not much else to say. The world's 'swing producer' is no more ...

[AdamB]

$this->bbcode_second_pass_quote('pstarr', '
')This chart is a crystal-clear proof of Westexas' Export-Land model, and his repeated assertion over the years that SA peaked in 2005. There is not much else to say. The world's 'swing producer' is no more and all countries (save a few decimated by war) are pumping full out.

[EdwinSm]

Back to the original question of "How much longer....?"

If I understand the report correctly, then IEA is saying 2017 (or possibly a little later).
$this->bbcode_second_pass_quote('', 'T')he IEA said: "Only in 2017 will we finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices when the market, having balanced, then starts to draw down those stocks."

[AdamB]

I'll go with the EIA folks on the short term effects. While they have a habit of underestimating things, like the shale revolution, or overestimating things, like the price, they generally have a solid method for what they do, and have plenty of economists on deck for this kind of work, which is why they have a better track record than some others when predicting these things.

Looks like stocks are going to stay high for at least 2 years, and that means that price will probably stay low.

[Plantagenet]

$this->bbcode_second_pass_quote('pstarr', '.')..a 2005 peak in Saudi Arabian oil production.

[Plantagenet]

$this->bbcode_second_pass_quote('pstarr', '
')$this->bbcode_second_pass_quote('Plantagenet', '4'). Peak Oil: Ghawar oil production in KSA could peak and begin to drop rapidly by 7-10% per year, or aging Soviet-era oil fields in Russia could see their production collapse and Russia oil production could quickly drop, eventually moving the oil market into balance.