Russia cuts it's own Oil Throat

The Saudis have claimed Russia cuts it's own Oil throat.

www.businessinsider.com...

A Saudi Oil ministry adviser has claimed in a recent speech that Russia and Mexico refused to reduce production and OPEC decided to also maintain production.

fingfx.thomsonreuters.com...

Specifically in the speech he mentions a meeting with Russia and Mexico only days before OPEC's announcement to not cut production where Russia refused to reduce production. In the meeting they refused to cut oil production in conjunction with OPEC.

This theory fits the Occam's Razor theory. Non-OPEC producers have often refused to cut production leaving the pain of selling less up to OPEC who does so to keep prices high. In this situation the Saudis felt sending a message to non-OPEC members was a good idea.

Being a conspiracy site, I still feel the US had a hand in OPEC's decision to flood the market with Oil. The sanctions against Russia haven't produced anything painful to Russia beyond some different vacation destinations for a few rich people. The price of Oil tanking has crippled Russia and several other Oil producers, including US companies.

www.businessinsider.com...

US Oil is hanging on barely as bankruptcies and high cost financing show an industry on the verge of disaster.

So if you want to know who to thank for those low prices at the Gas pump, thank Vladimir Putin. I thank him for sticking it to the rich Oil men...even if he stuck it to himself!


* here Putin seems to realize he messed up

a reply to: noeltrotsky

Being a conspiracy site, I still feel the US had a hand in OPEC's decision to flood the market with Oil.

No, demand is lower and the US and Canada are producing more oil. The US is a monster now. Source

US Oil is hanging on barely as bankruptcies and high cost financing show an industry on the verge of disaster.

This is simply incorrect. Taken from your article:

Low prices depress profits and pinch balance sheets, especially for smaller companies, which can be heavily leveraged.

What is happening is there is a huge boom in energy in the US and Canada. Every two bit well digger is trying to become an energy company. It is literally the wild west/gold rush situation. These things swell and swell then bust. What remains is the real healthy properly run companies. This is a normal cycle.

The fact is that the US/Canada are set for 30 years or so. What we in the US have to watch for is the law changing so that home grown oil can be sold on the international market. Personally, i would say we use as much of Russian and Saudi oil as we can first, then tap what we have, even if it costs us more. It will be cheaper in the long run.


V

I'm feeling it. Many of my clients are exposed to oil and gas prices. This means their research and development budgets are under funded which means some of my companies do poorly. Never seen inventories this high. This should be a good summer to travel around cheaply.

a reply to: Variable

i've posted that article and a couple of others that said the same thing a couple of times.
it seems people don't want to accept the U.S. is set to be the #1 producer of oil until 2030 or longer.

some seem to think that if OPEC or others keep producing oil at the rate they are that it will make fracking cost to much, and that the U.S. companies will stop. not gonna happen.

a reply to: Variable

www.bnn.ca...

not much of a boom going on in Canada at the moment.

Statistics Canada released February’s job data on Friday, and the numbers aren’t looking good for Alberta, with the province posting a net loss of 14,000 jobs.

The job losses are a result of the fall in the price of oil. With oil costing less, many energy companies have cut their spending, which has led to the delay and outright cancellation of some oil exploration and drilling projects.

edit on 21-3-2015 by snowspirit because: (no reason given)

originally posted by: Variable
What is happening is there is a huge boom in energy in the US and Canada. Every two bit well digger is trying to become an energy company. It is literally the wild west/gold rush situation. These things swell and swell then bust. What remains is the real healthy properly run companies. This is a normal cycle.

Agree with you on most of your post. I think the massive price drop in Oil has more to do with struggling companies than a Gold Rush situation, but there sure are lots of small players that will get pushed out painfully.

Nice to read intelligent posts! I've been swamped by crazy for awhile.

originally posted by: snowspirit
not much of a boom going on in Canada at the moment.

I think he meant prior to the Price crash.

I have often watched as a smaller but wiser opponent would present a seemingly vulnerable aspect of himself to his opponent ,only as a bait to get to the more vulnerable parts .There was strong talk about cutting Russia off from using SWIFT and everyone at that time were wooing how bad that would heart them .On the surface it sure was soothing to the talking heads in the western MSM but as crazy as that may have looked like the cats meow they actually realized that they would be cutting their own throat . They ended up giving Russia a comfortable seat in SWIFT .

The big issue with oil as it stands is the west and the ME states don't have the corridor through Syria as yet .No fear because the US special forces are on the ground and giving important Intel where they need the bombs dropped for now . A big problem for the west is that they are no left to fight both sides while remaining invisible and it will only be a matter of time before they will be dealing on every front . Maybe Kerry is correct that they are going to have to talk with the Syrian Govt .On one hand ,Iran will only unleash their spigots of oil once the sanctions are lifted and on the other hand Russia will have to maybe face a shrinking price for a barrel of oil .

SA's biggest challenge is how to maintain their regional power over their proxies while Iran climbs out of the sanction barrel they have been in for so long .Maybe they should export clean nuclear power to their neighbors and get a hold of some high tec military toys .I am sure they will have a bid going out not long after their own oil starts flowing .

In its monthly report, released Friday, the IEA says the oil price hasn’t stabilized, as it recently appeared to do so, and could shift further as the U.S. runs out of places to store it.

The US is stock piling oil, and that's helping to keep prices too low.
It's not good for Canada's economy at all....

**added from above article 'cause on a supposedly "smart" phone, there's no scrolling ability in that tiny posting window

originally posted by: hounddoghowlie
a reply to: Variable

i've posted that article and a couple of others that said the same thing a couple of times.
it seems people don't want to accept the U.S. is set to be the #1 producer of oil until 2030 or longer.

some seem to think that if OPEC or others keep producing oil at the rate they are that it will make fracking cost to much, and that the U.S. companies will stop. not gonna happen.

I love this, I really do.

Another example of the natural state of things being very good for ordinary people and very bad for power hungry despots.

originally posted by: machineintelligence
Never seen inventories this high. This should be a good summer to travel around cheaply.

Excellent point! I've seen predictions of Oil dropping to below $40/barrel...and not from cranks. Besides a great driving summer a price that low might break Russia's budget and literally cause a revolution. The last Russia crises coincided with an Oil price drop as well.

a reply to: noeltrotsky

I think what is happening is a consolidation of resources in front of a building currency war. As the Fiat currencies collapse the people invested in them are purchasing tangibles like oil and gas. The dollar dump is building so capital is shifting to resources. Now this tanks prices in tangibles but later the fiat money tanks and the capital flow reverses.

Haha people think the shale oil is going to flow for the next 15 years as it is now. Reality will smack you in the face well before the end of the decade.

a reply to: snowspirit

not much of a boom going on in Canada at the moment.

It is true right now lower prices is causing a shake up. The articles spoken about references that quite well. The point is, that the resources are there and can be tapped. Companies that are well run and financed properly will survive and be players for years to come. This is a normal part of the boom/bust cycle.

We won't go into what Alberta is doing to their wilderness getting at that shale oil. Nor the reluctance of Progressive left to exploit fossil fuels and the means of production and transport a la the Keystone pipeline. The fact is that fossil fuels are not going away. Regardless of short term price cycles that drastically effect other countries, the US and Canada are sitting on huge reserves and potential energy Independence. This is important to the US economy going forward.

Russia doesn't have the economic base to consume their own energy resources and grow. They are corrupt and broken from that stand point.

V

a reply to: snowspirit

I think what may be restraining the Canadian market is that they haven't built the pipe lines (east,west, and south) yet .They are trying every trick in the book to put them through but they end up circling the wagons because of provincial ,Native , politics . I cant see them getting their SH%# together anytime soon .

originally posted by: the2ofusr1
a reply to: snowspirit

I think what may be restraining the Canadian market is that they haven't built the pipe lines (east,west, and south) yet .They are trying every trick in the book to put them through but they end up circling the wagons because of provincial ,Native , politics . I cant see them getting their SH%# together anytime soon .

Oh a pipeline is coming to a coast near you soon...don't worry!

originally posted by: pl3bscheese
Haha people think the shale oil is going to flow for the next 15 years as it is now. Reality will smack you in the face well before the end of the decade.

I understand that shale Oil drilling typically doesn't provide as long lasting wells as regular Oil drilling. However the timeline of the Shale Oil boom might be extended by more deposits and new tech to recover more. I think 15 years of current production isn't crazy to think possible. Now if you said 50 years I'd be with you. I don't think Shale can last that long.

a reply to: noeltrotsky

They can claim whatever they want now,but this story as it was happening says something else.

www.reuters.com...

Saudi Arabia blocked calls on Thursday from poorer members of the OPEC oil exporter group for production cuts to arrest a slide in global prices, sending benchmark crude plunging to a fresh four-year low.

originally posted by: machineintelligence
a reply to: noeltrotsky

I think what is happening is a consolidation of resources in front of a building currency war. As the Fiat currencies collapse the people invested in them are purchasing tangibles like oil and gas. The dollar dump is building so capital is shifting to resources. Now this tanks prices in tangibles but later the fiat money tanks and the capital flow reverses.

I'd expect a surge in Gold and Silver to signal if this was happening. Storing Oil is expensive to protect wealth.

a reply to: noeltrotsky

The EROI was terribly low even at 3x the price per barrel compared to where it currently stands. That's not to talk about the physical difference which makes the decline rather steep, which you seem to be pointing to. There will be ebb and flow for a while yet, due to the time lag between investment and implementation, interacting with supply and demand forces, but there's not a chance in hell flow remains the same as now in 2030.