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Page added on September 8, 2016
Wild Cards in Play During Run-Up to OPEC Freeze Meeting
Another day, another set of headlines about who’s on first – and indeed, who’s even a player – in the latest iteration of a potential OPEC (Organization of the Petroleum Exporting Countries) production freeze on crude.
While the United States basked in an end-of-summer break, folks around the world appeared busily chatting – about an upcoming chat – in Algiers at the end of the month. OPEC leaders have recently signaled an intent to hold an informal meeting there to discuss a crude production freeze designed to stabilize oil prices. As such, the meetings before the meeting have commenced.
This could be a good sign. The days leading up to this informal meeting appear to be moving along better than the ill-fated June attempt to reconcile a production freeze. At the very least, the players this time are communicating with one another.
The headlines can be dizzying. During the Labor Day holiday in the United States, Russian oil leaders met with Saudi Arabia; OPEC met with Qatar and Algeria; and on Tuesday, OPEC met with Iran.
The fruits of the Russia-Saudi meeting appear to be a new task force to monitor the markets, according to news reports. At Tudor Pickering Holt & Co., analysts suggested sentiment isn’t exactly optimistic about the bilateral panel. In short, describing those bearish on the market as “scoffing.”
However, TPH said in a note to investors, “Remember, Russia is important as OPEC needs key non-OPEC producers’ cooperation if a production freeze is possible later this month in Algeria.”
Over in Doha, OPEC leaders met with the oil ministers of Qatar and Algeria Monday. OPEC Secretary General Mohammad Sanusi Barkindo underscored the importance of the countries working together to ensure stability and boost security and safety, according to an OPEC statement.
Dr. Mohammed Bin Saleh Al-Sada, minister of energy and industry of Qatar and president of the OPEC Conference, “emphasized the importance of making efforts among the world’s oil producers to arrive at a joint decision regarding production in the future,” according to the statement.
And Tuesday, OPEC met with Iran. In a news statement from Vienna, OPEC confirmed that Iran’s President Dr. Hassan Rouhani, along with oil minister Bijan Namdar Zanganeh, gathered with Barkindo in Tehran.
Rouhani told OPEC his country had “suffered greatly under sanctions” and it’s vital that Iran makes up for its lost production. He also said OPEC “has a responsibility to restore market stability, and Iran will continue to support these endeavors and help bring about fair prices that are conducive to both producers and consumers,” according to the statement.
In short, Iran’s leaders say they want to work with OPEC, but they’re going to get their production up to pre-sanction levels. It’s challenging to see how one is conducive to the other.
Analysts at Morgan Stanley said as much in a Tuesday research note.
“Iranian expectations could be a headwind for any OPEC production deal. Iran’s condition appears to be that OPEC must agree to allow Iran to return to its historical OPEC export quota and pre-sanction production levels – a difficult ask,” the analysts wrote. “Even if successful, an OPEC freeze would likely be a short term positive but a medium term negative for oil prices.”
31 Comments on "Wild Cards in Play During Run-Up to OPEC Freeze Meeting"
Boat on Thu, 8th Sep 2016 10:58 am
So OPEC enacts a freeze and prices rise. Who wins new market share? Tar sands, fracking and off shore drilling.
Plantagenet on Thu, 8th Sep 2016 11:14 am
This article is out of date—-OPEC and Russia already met and failed to enact a production freeze and a price rise.
The bottom line is we’re still in an oil glut.
Cheers!
rockman on Thu, 8th Sep 2016 11:26 am
“…in the latest iteration of a potential OPEC (Organization of the Petroleum Exporting Countries) production freeze on crude.” Just funny as hell to see the term “production freeze” at a time when it’s very unlikely production could be increased by any meaningful amount by any nation in the short to medium term. Meet and agree or don’t. ..doesn’t mean a f*ckkng thing. LOL.
shortonoil on Thu, 8th Sep 2016 12:49 pm
“Meet and agree or don’t. ..doesn’t mean a f*ckkng thing. LOL. “
That about sums it up!
Of course the media likes to make mountains out of mole hills, and silk purses out of pigs ears. Being absolutely, completely useless is what they are paid to be. Hey, most of these folks still have $100,000 in student loans to pay off. When my dentist, and her dentist husband can not make ends meat, being just out of school for a few years, these journalists must be close to starvation. They will say anything to keep that paycheck coming.
Boat on Thu, 8th Sep 2016 12:55 pm
The eia raised it’s consumption growth estimates for the world from 1.4 to 1.5 mbpd. 2016 started the year with a 1.3 mbpd forecast.
rockman on Thu, 8th Sep 2016 3:43 pm
Boat – Given the long time lag it takes for the global economy to respond to changing oil prices I suspect we’ll see their projection to continue to be bumped up.
Boat on Thu, 8th Sep 2016 4:17 pm
New Caspian oil fields to add to glutted global market
Two new Caspian Sea oil fields are due by the end of this year to add significant volumes of crude to a world market already in glut, possibly depressing prices just as producers including Russia talk about reviving them.
According to industry sources and a loading schedule seen by Reuters, the Kashagan field in Kazakhstan’s sector and Lukoil’s Filanovsky field in the Russian sector – both of which are scheduled to come on stream soon – will together produce at least 200,000 barrels of crude per day (bpd) by the end of 2016.
http://www.reuters.com/article/us-oil-caspian-idUSKCN11E1BZ
Apneaman on Thu, 8th Sep 2016 4:41 pm
Boat, did you hear that latest bullshit from G7 that they are going to phase out FF subsidies by 2025? Good for a laugh and to string the sheeple along awhile longer. If they did end the subsidies what do you think would happen? What happened when France and GB stopped subsidising the Concord? It’s in an aviation museum is what happened.
G7 nations pledge to end fossil fuel subsidies by 2025
Leaders of the UK, US, Canada, France, Germany, Italy, Japan and the EU urge all countries to join them in eliminating support for coal, oil and gas in a decade
“Across the G7, subsidies are already falling, assisted by falling commodity prices. A notable exception is the UK, which increased subsidies by opening up new tax breaks for North Sea oil producers. Japan has been criticised for funding new coal projects, both at home and abroad.
“We already see [some in] the G7 going in the wrong direction since Paris. Just because they are saying this [about fossil fuel subsidies], it’s not a fait accompli,” said Whitley. Canada also recently extended some subsidies for natural gas.
The G7 joins the leaders of the Organisation for Economic Co-operation and Development (OECD) and the World Bank, who have previously called for an end to assistance for fossil fuel projects.
The statement did not define precisely what the G7 consider to be a subsidy. The word “inefficient” in the G7 text indicates subsidies that distort energy markets. The OECD estimates that this type of support for fossil fuels within its member states is $160-200bn (£109-136bn) each year.
But when the cost of damage from pollution and climate change is factored in, the International Monetary Fund has estimated that support increases to a staggering $5.3tn a year, or $10m per minute. This is more than the total global spend on human health.”
https://www.theguardian.com/environment/2016/may/27/g7-nations-pledge-to-end-fossil-fuel-subsidies-by-2025
Boat on Thu, 8th Sep 2016 6:41 pm
ape,
I wouldn’t read to much into what the G7 claims until tech like batteries and EV’s are much cheaper. 15 to 20 years seems likely. The G7 can’t just bite the hand that fuels them in the short term.
Boat on Thu, 8th Sep 2016 7:10 pm
California extends most ambitious climate change law in US
Experts said going forward will be more challenging because the new goal — to reduce emissions 40 percent below 1990 levels by 2030 — is considerably more ambitious and many of the easy solutions have been employed.
The state plans to build on that foundation and ramp up other efforts including increasing renewable electricity use, boosting energy efficiency in existing buildings and putting 1.5 million zero-emissions vehicles on the road, according to the California Air Resources Board, which is in charge of climate policy.
http://bigstory.ap.org/article/d632c6f73838472b8910724f4d7a0b43/california-extend-most-ambitious-us-climate-change-law
Apneaman on Thu, 8th Sep 2016 8:40 pm
Boat, none of it that shit matters unless they suck at least a hundred PPM of CO2 out of the atmosphere and reduce the population by 95% and shut down the nuke plants or most of them. Even then it would be a close run thing. None of that is going to be done and more forcing on all natural systems will carry on as long as possible. Depletion or death are the only things that will stop the humans from growing. Plague species.
Boat on Thu, 8th Sep 2016 9:10 pm
ape,
None of that is going to happen. Nature is in charge of population reduction. When those storms you post take out 10’s of thousands at a pop, then you will see real change in human attitude. No self sacrifice to scale before then for prevention of climate change.
Apneaman on Thu, 8th Sep 2016 9:43 pm
Boat, the worst thing about those storms from a societal perspective is the infrastructure and economic damage. Louisan was 8.7 billion and 13 dead – a personal tragedy if it’s one of yours, but not a very big body count. Something like 110 people a day are killed in car wrecks in the US everyday. It’s when agriculture is significantly impacted that the big dying will start and as per usual it will hit the poorest countries and people first.
Boat on Thu, 8th Sep 2016 10:14 pm
ape,
I’m not sure about that. A lot of large populations on the coasts. Take Houston, (one of your fav targets), Bigger storms could possible take out much bigger chunks of the city. They might rebuild once or twice but in 20 years I see most of the city moving north. Repeat that same scniro around the world.
joe on Thu, 8th Sep 2016 11:36 pm
Peak oil on track. Some people think it will be announced like some red carpet premiere. Governments will quietly transfer policies in other energy directions, they will stop supporting the industry and let it survive on its own, making it diversify itself and price swings will become less important as changes in prices at the pump become less relevent. Sadly however as oil use decreases, so will the supply of the other products which will spill over into other industries. So the real question is this, if oil use as an industrial chemical is indispensable then transport fuel as a bi product will become so cheap its use will be inevitable, is it possible that oil use will ever end, or will other measures be needed such as the banning of mass production of ff engines, would such a world be possible. I think probobly not. We use oil as we once used a spear, we probobly will never give it up, regardless of cost. The world we will create as oil use peaks and declines then recovers and peaks etc will not be a very nice one.
Truth Has A Liberal Bias on Fri, 9th Sep 2016 5:46 am
This article is not out of date as retard plant suggests. It is dated September 6, 2016 and refers to a meeting that is to be held on September 26.
Truth Has A Liberal Bias on Fri, 9th Sep 2016 5:46 am
The bottom line is plant is a retard
brough on Fri, 9th Sep 2016 9:43 am
OPEC may well agree a production increase freeze, but I’m not sure the petroleum markets any longer responds to the normal supply/demand paradigms. Too much oil and oil products in global storage, may taken months or even years for the oil biz to reach equilibrium again. Oil should be around $30 pbl, just speculation keeping it afloat.
shortonoil on Fri, 9th Sep 2016 11:52 am
“I wouldn’t read to much into what the G7 claims until tech like batteries and EV’s are much cheaper. 15 to 20 years seems likely.”
In 15 to 20 years, if anyone is still around, they will be eating the weeds out of their lawn. They are going to be too busy to be tooling around in an EV, Too busy trying to stay alive, that is. The oil age is ending, and the global industrial economic system is collapsing. The world has become an ecological death trap for more than half of the life forms on it, and the world has at most a couple hundred billion barrels of usable oil remaining.
This constant attempt to escape reality is getting depressing! You can take a break from trying to cheer us up anytime.
Cloggie on Fri, 9th Sep 2016 12:05 pm
In 15 to 20 years, if anyone is still around, they will be eating the weeds out of their lawn…The oil age is ending, and the global industrial economic system is collapsing.
shortonoil bravely soldiers on like these Japanese imperial warriors, who as late as 1974 finally surrendered to the new reality of American empire. short can’t adapt to the new reality that we are living on one giant stinking global tar ball and in 2016 still produces Heinbergian posts, spreading a feeling of nostalgia to the 2005-2013 days that are no more:
Tears, idle tears, I know not what they mean,
Tears from the depth of some divine despair
Rise in the heart, and gather to the eyes,
In looking on the happy autumn-fields,
And thinking of the days that are no more.
https://en.wikipedia.org/wiki/Japanese_holdout
Boat on Fri, 9th Sep 2016 12:11 pm
short,
Demand is up, supply is strong, prices are good. Your rhetoric won’t change BAU. Wind has finally broke through with batteries and solar soon to follow. Be of good cheer.
Apneaman on Fri, 9th Sep 2016 12:12 pm
Clogged, you’re a fucking clueless moron and you’re whistling past the graveyard act is boring boring boring.
Apneaman on Fri, 9th Sep 2016 12:16 pm
Boat, do you have a stat that demonstrates how much transportation, land, sea & air, wind, batteries and solar currently power?
Boat on Fri, 9th Sep 2016 12:55 pm
ape,
Here are a couple of charts. Renewable and nuclear around 100 quadrillion btu with nuke around 25. Total around 800 quadrillion.
http://www.eia.gov/forecasts/ieo/world.cfm
Apneaman on Fri, 9th Sep 2016 1:50 pm
Boat, that is an “outlook” and not what I was getting at. I want to know as close to accurate as possible if there has been an analysis of how much of global transportation, land, sea & air, is currently being powered by so called renewables?
It would be no surprise to me if the wealthier countries eventually produced a great deal of their electricity from non fossil fuel sources given enough time and government support and getting rid of obstructionists fossil fuel interests (Koch’s, ALEC, et al).
What percent of total world energy demand does electricity make up? I think about 20%, but it will need to grow if more passenger vehicles are going to be electrified. Currently there is nothing that can replace bunker fueled ocean going transportation, or diesel electric trains or tractors hauling goods or heavy mining, construction and farming equipment. Nor for aviation. Not even close. You would need some kind of battery revolution to electrify all those and have major increases in producing electricity without fossil fuels.
I don’t do projections and not even with climate as they have proved out to be highly inaccurate on the timelines. It’s coming.
The thing with developing new technologies is that the rate has slowed down and this is because it’s getting harder/more expensive to have big breakthroughs. Other than the internet, we just been tweaking already existing technologies. Is it possible, sure but it’s less likely in a world of shrinking R&D dollars. Short term profits is where it’s at and most of the brightest minds get recruited by Corporis before graduation. A large portion of the brightest technical minds are working for NSA et al like them or Corporations whose sole purpose is to kill people more efficiently or they’re in Silicon Valley working 19 hours a day trying to come up with the next Go Pokeman. So much for the econOprists much touted theory that more people equals more people working on solving the worlds problems. More like more brainiacs working on the next major short lived dopamine hit .
You Call this Progress?
“The (slightly overstated) claim is that no major new inventions have come to bear in my 45-year lifespan. The 45 years prior, however, were chock-full of monumental breakthroughs.
A Tale of Three Times
Before diving into the defense of my bold claim, let’s set the stage with a thought experiment about three equally-separated times, centered around 1950. Obviously we will consider the modern epoch—2015. The symmetric start would then be 1885, resulting in 65-year interval comparisons: roughly a human lifetime.
So imagine magically transporting a person through time from 1885 into 1950—as if by a long sleep—and also popping a 1950 inhabitant into today’s world. What an excellent adventure! Which one has a more difficult time making sense of the updated world around them? Which one sees more “magic,” and which one has more familiar points of reference? The answer is obvious, and is essentially my entire point.
Take a moment to let that soak in, and listen for any cognitive dissonance popping inside your brain.”
http://physics.ucsd.edu/do-the-math/2015/09/you-call-this-progress/
The 7 biggest problems facing science, according to 270 scientists
“The scientific process, in its ideal form, is elegant: Ask a question, set up an objective test, and get an answer. Repeat. Science is rarely practiced to that ideal. But Copernicus believed in that ideal. So did the rocket scientists behind the moon landing.
But nowadays, our respondents told us, the process is riddled with conflict. Scientists say they’re forced to prioritize self-preservation over pursuing the best questions and uncovering meaningful truths.”
“Already, much of nutrition science, for instance, is funded by the food industry — an inherent conflict of interest. And the vast majority of drug clinical trials are funded by drugmakers. Studies have found that private industry–funded research tends to yield conclusions that are more favorable to the sponsors.”
http://www.vox.com/2016/7/14/12016710/science-challeges-research-funding-peer-review-process
Boat on Fri, 9th Sep 2016 2:54 pm
ape,
Humans will never end their need for FF. Replacing coal with wind/solar is possible in a few decades. Bunker fuel can be easily be replaced with diesel. When EV’s take off demand For oil will drop. For the sake of argument lets say the use oil drops 75 percent. There will still be plenty of oil around for a price.
Apneaman on Fri, 9th Sep 2016 2:56 pm
Boat, I wait with bated breath.
MikeX11.2 on Sun, 11th Sep 2016 7:29 am
I’m now resigned to agree, that food will be our biggest future problem, from Global Warming.
A 105 degree day killed an oak in my back yard.
As the variability of these heat waves increases it will simply wipe out food production at random but at an increasing rate.
We will at least see food inflation, and it’s not too late to move to Canada for food production, message to US farmers.
Davy on Sun, 11th Sep 2016 7:47 am
Mike, the key is nowhere is safe for growing food especially Canada who is experiencing the lion share of heating. Instability does not favor agricultural food productivity and that is what we have. This instability is financial, climate, and involves depletion. They key issues optimist forget is we have a huge population that needed increasing growth of growth to cover this exploding populations’ needs. I call it an exploding populations because we have cross thresholds of overshoot and any new mouths to feed are an explosion of risk. We are going exponential and once we go nonlinear we are finished. We are in a phase change and the turbulence is going to clear into a new reality of food insecurity, hunger, and famine.
makati1 on Sun, 11th Sep 2016 9:17 am
Interesting comment about climate affecting the poorer countries first. What do you base that idea on? References please. Oh, just prejudice. I understand now.
I live in one of those ‘poorer’ countries near the equator and there has been little climate change here that I have noticed or read about. The grocery stores are stocked with all of the things from around the world that you can possibly want. Prices are comparable with those in the US or cheaper.
True, when the SHTF I might not be able to buy cheeses from Europe or butter from New Zealand, but I will manage with local substitutes. The higher elevations here still produce strawberries, iceberg lettuce, etc. as they always have. The same cannot be said for places like California or New Jersey, the (ex)gardens of America.
I love the finger pointing of ignorant Americans as they try to justify their #1 position that is “immune to reality”. I would propose that it will be the 1st world that will feel starvation the hardest as most of their food is imported. Starvation is not new to the third world. It will be to the obese in the 1st world. What is the percentage now? 30%? More? LMAO
Davy on Sun, 11th Sep 2016 10:02 am
Dream on Makati1, your country is in the top 5 of those exposed to climate risk. You are in a country of 100mil that has a footprint the size of the state of Arizona. Fisheries and forest are near collapse. Major metropolitan areas are seeing water degradation from saltation and pollution. Your country can barely feed itself witness a few years back with rice riots. It is an export dependent country that will fold when globalism folds. My point is you are in no refuge. We are all in trouble quit stroking your penis by your Makati high rise pool.