OPEC EXPECTED TO CUT - WHERES THE CUT FROM UNCLE SAM

[Douglas Buckland + 6,308]

2 minutes ago, wrs said:

Again, Doug, the US operates on a free market basis where price and supply controls the markets.  When prices went lower as a result of the foolish lower for longer policy that MBS implemented in 2015-2016, US production dropped and then OPEC decided that it would go the other way and limit it's production because they were losing too much money.  Russia got involved too.  There was no agreement for US producers to stop producing.

The US market is not a dumping ground for anti-competitive oil from KSA.    I pay a lot in taxes and I expect to get something for them.  Support from my govt against anti-competitive practices is a reasonable expectation.  That's not whining.  I took it in the ass back in 2015-2016 also.

 

I really don’t give a damn about the ‘free market’ issue! It is simply common sense that if you pump your max capacity into an already over supplied market...you will drive the price of that commodity DOWN!

When you are debt ridden and cannot generate a positive cash flow...MAYBE YOU SHOULD LOOK INTO THIS.🤔

Finally, the LTO boys and girls now seek protection or a bailout from exactly what they were doing to the global market for years! If you can’t stand the heat, get out of the kitchen!!!

[Douglas Buckland + 6,308]

5 minutes ago, wrs said:

I think it's intentional but that's a conspiracy minded point of view.

It is criminal and should be addressed as such.

[wrs + 893]

Just now, Douglas Buckland said:

I really don’t give a damn about the ‘free market’ issue! It is simply common sense that if you pump your max capacity into an already over supplied market...you will drive the price of that commodity DOWN!

When you are debt ridden and cannot generate a positive cash flow...MAYBE YOU SHOULD LOOK INTO THIS.🤔

Finally, the LTO boys and girls now seek protection or a bailout from exactly what they were doing to the global market for years! If you can’t stand the heat, get out of the kitchen!!!

No one is seeking protection from what they have been doing.  They are seeking protection from either an unknown event like CV or a clearly anti-competitive action from a declared enemy.  Furthermore, no one even knows what the max capacity is in the Permian or the rest of the shale plays.  You keep blaming shale but consider the timeline.

OPEC curtails production and drives prices over $100 for years.

Shale is developed and makes tons of money above $75

KSA decides they can't afford to lose anymore market share in the US and begins dumping oil

Prices decline by more than 50% in 6 months and then stay there for over a year.

US output declines 

OPEC+ is formed and they limit their production.

Price goes back up and in the meantime, shale operators improve cost controls and find they can make decent profits at $50/bbl so production in the US rises.

KSA loses more market share in the US and now has to fight Russia in Asia and Europe.

That's the story Doug.  Shale isn't a money loser and wasn't at $50 but KSA doesn't want to lose it's grip.  The real story is a war for oil dominance and KSA is losing.  They are ever more desperate in their actions.  I honestly don't know how Trump can call them an ally with a straight face.

[James Regan + 1,776]

7 hours ago, James Regan said:

Let’s wait until a refinery or oil platform gets a breakout with CV that will be interesting to see how it’s handled??

https://www.linkedin.com/posts/greg-williams-a3881353_one-person-confirmed-with-corona-virus-on-activity-6643815383918800896-qS_v

[Ward Smith + 6,615]

3 hours ago, wrs said:

No one is seeking protection from what they have been doing.  They are seeking protection from either an unknown event like CV or a clearly anti-competitive action from a declared enemy.  Furthermore, no one even knows what the max capacity is in the Permian or the rest of the shale plays.  You keep blaming shale but consider the timeline.

OPEC curtails production and drives prices over $100 for years.

Shale is developed and makes tons of money above $75

KSA decides they can't afford to lose anymore market share in the US and begins dumping oil

Prices decline by more than 50% in 6 months and then stay there for over a year.

US output declines 

OPEC+ is formed and they limit their production.

Price goes back up and in the meantime, shale operators improve cost controls and find they can make decent profits at $50/bbl so production in the US rises.

KSA loses more market share in the US and now has to fight Russia in Asia and Europe.

That's the story Doug.  Shale isn't a money loser and wasn't at $50 but KSA doesn't want to lose it's grip.  The real story is a war for oil dominance and KSA is losing.  They are ever more desperate in their actions.  I honestly don't know how Trump can call them an ally with a straight face.

^This

The whole reason we have the worldwide petrodollar is because of the devil's bargain Kissinger made with the Saudis after they'd royally screwed us, not once but twice. The "best minds" at our "intelligence" agencies were "certain" the US was on the downward slide off the King Hubbert curve and we'd be permanently printing pesos to perpetually purchase petroleum ad infinitum. That was the plan and everything from the 70's to the '10's was hinged on that plan. This includes Wars, terrorist attacks and market meltdowns (pre this current one). 

Then something horrible happened. Mitchell figured out a better way for gas, and Hamm followed suit with oil, and the new gold rush was on! Instead of bankrupting our grandchildren and their future to economic serfdom to the Middle East, we dramatically reduced purchases from there while dramatically increasing domestic production. The follow on effects of this were numerous and rarely enumerated: balance of payments improvements, stronger dollar, stronger PPP, better security, higher standard of living and on and on. 

But those geniuses in the CIA weren't happy with this. Their global chess game was turning into Go and they don't know how to play Go. Meanwhile the world's greatest chess players, the Russians didn't know how to deal with this brave new world either. They're all fighting back, including the CIA and the poor oil producers are in the cross hairs through no fault of their own. The market is being manipulated left and right but take a close look at gasoline prices and jet fuel and compare them to historical bbl spot pricing. The correlation is missing in action. Demand going lower should have driven end product pricing lower, which due to elasticity of supply and demand would increase demand (lower prices), eating up the greater supply. 

[Old-Ruffneck + 1,246]

3 hours ago, wrs said:

Shale isn't a money loser and wasn't at $50 but KSA doesn't want to lose it's grip.  The real story is a war for oil dominance and KSA is losing.  They are ever more desperate in their actions.  I honestly don't know how Trump can call them an ally with a straight face.

KSA hasn't been an ally since the late 60's. When they figured out we were so dependent on their flow of oil along with the rest of the Arab Nations they started tightening the screw to us. Remember when a lot of gas station ran out of gas in 73? I sure do!!!! They've tried to hurt us many times. Just remember how many Saudi's were flying them planes the morning of 9/11. I would never trust them, or Iran, Iraq.....and so on. They despise the US. Trump I am sure realizes their nature. He is surrounded with good generals.

[James Regan + 1,776]

1 hour ago, Old-Ruffneck said:

KSA hasn't been an ally since the late 60's. When they figured out we were so dependent on their flow of oil along with the rest of the Arab Nations they started tightening the screw to us. Remember when a lot of gas station ran out of gas in 73? I sure do!!!! They've tried to hurt us many times. Just remember how many Saudi's were flying them planes the morning of 9/11. I would never trust them, or Iran, Iraq.....and so on. They despise the US. Trump I am sure realizes their nature. He is surrounded with good generals.

As the US despises the Arab nations, KSA is merely one of the biggest aircraft carriers USS Sadik. As is Bahrain Kuwait etc merely US bases to support the dominance of world oil, now things have shifted somewhat. 
We buy your guns bang bang Iran, USA no good, Weapons very good....

Believe it they despise the USA and all it stands for, never forget it....

[George8944 + 128]

On 3/5/2020 at 9:33 AM, BLA said:

United States is a Free Market Economy

In theory.  The FED with its bubble blowing and Congress with its bailouts have pretty much made it a buzzword more than a reality.

[George8944 + 128]

5 hours ago, Ward Smith said:

The whole reason we have the worldwide petrodollar is because of the devil's bargain

Petrodollars is what secured us as a reserve currency after we abandoned the gold standard.  Countries would sell us their products in dollars so they could buy oil.   We got cheap goods and the ability to dictate interest rates and prices around the world.  It’s been a good deal until we started printing too much money and spending like debt doesn’t matter.

There is more money in circulation outside the US, than inside.  That’s in part due to the petrodollar effect.

[Enthalpic + 1,496]

18 hours ago, George8944 said:

In theory.  The FED with its bubble blowing and Congress with its bailouts have pretty much made it a buzzword more than a reality.

Exactly

Pretty hard to argue you are "free market" while at the same time as cancelling / rewriting free trade agreements and crying about trade imbalances.

"Free markets" are great when you are doing well and winning on the international stage.  When your banks fail and other countries are eating your lunch "free market" goes out the window like some bad-news ticker tape or a bankrupt stock broker.  *splat*

Edited March 13, 2020 by Enthalpic

[Douglas Buckland + 6,308]

Okay, forget the politics and just use common sense.

Was the unrestrained pumping of US shale oil good, or bad, in regards to stabilizing the global oil price?

Did the US shale oil industry benefit hugely from any production cut by OPEC+ while they did not restrain their production in the least?

Can the US shale oil industry remain viable, without a bailout, during this price war?

Does the US shale oil industry accept ANY responsibility for the situation we now find ourselves in?

I keep seeing people commenting that KSA is not our ally, yet we have done absolutely NOTHING to shore up the price of oil, which is crucial for the well-being of KSA! Some ally we’ve been!

Edited March 13, 2020 by Douglas Buckland
Typo

[Enthalpic + 1,496]

9 minutes ago, Douglas Buckland said:

Okay, forget the politics and just use common sense.

Was the unrestrained pumping of US shale oil good, or bad, in regards to stabilizing the global oil price?

Did the US shale oil industry benefit hugely from any price cut by OPEC+ while they did not restrain their production in the least?

Can the US shale oil industry remain viable, without a bailout, during this price war?

Does the US shale oil industry accept ANY responsibility for the situation we now find ourselves in?

I keep seeing people commenting that KSA is not our ally, yet we have done absolutely NOTHING to shore up the price of oil, which is crucial for the well-being of KSA! Some ally we’ve been!

You mean production cut leading to higher prices.

I know what you meant but it's the opposite of what you wrote.

[Enthalpic + 1,496]

16 minutes ago, Douglas Buckland said:

Okay, forget the politics and just use common sense.

Was the unrestrained pumping of US shale oil good, or bad, in regards to stabilizing the global oil price? Bad

Did the US shale oil industry benefit hugely from any [production] cut by OPEC+ while they did not restrain their production in the least? Yes

Can the US shale oil industry remain viable, without a bailout, during this price war? No

Does the US shale oil industry accept ANY responsibility for the situation we now find ourselves in? No

I keep seeing people commenting that KSA is not our ally, yet we have done absolutely NOTHING to shore up the price of oil, which is crucial for the well-being of KSA! Some ally we’ve been!

 

[Old-Ruffneck + 1,246]

8 minutes ago, Douglas Buckland said:

Okay, forget the politics and just use common sense.

Was the unrestrained pumping of US shale oil good, or bad, in regards to stabilizing the global oil price?

Did the US shale oil industry benefit hugely from any price cut by OPEC+ while they did not restrain their production in the least?

Can the US shale oil industry remain viable, without a bailout, during this price war?

Does the US shale oil industry accept ANY responsibility for the situation we now find ourselves in?

I keep seeing people commenting that KSA is not our ally, yet we have done absolutely NOTHING to shore up the price of oil, which is crucial for the well-being of KSA! Some ally we’ve been!

When did unrestrained pumping over 1mbd start to get exported out?

When KSA saw what the US production increasing they flat out tried to bury us in oil. Didn't work but sure put a bind on the industry. 

Not on any long term basis can shale survive.....6 months and many will default.

US Shale is a free market oil, for sell to buyers....accept responsibility for?? try to make money? 

I won't apologize for expressing my opinion of KSA, trying to manipulate the market to put shale oil out of business few years back hurt a lot of folks, some lost their business's in West Texas over it. But it did make the industry stronger in the long run and run more lean. 

[Douglas Buckland + 6,308]

15 minutes ago, Enthalpic said:

You mean production cut leading to higher prices.

I know what you meant but it's the opposite of what you wrote.

Yeah, just noticed that myself...

[Douglas Buckland + 6,308]

6 minutes ago, Old-Ruffneck said:

When did unrestrained pumping over 1mbd start to get exported out?

When KSA saw what the US production increasing they flat out tried to bury us in oil. Didn't work but sure put a bind on the industry. 

Not on any long term basis can shale survive.....6 months and many will default.

US Shale is a free market oil, for sell to buyers....accept responsibility for?? try to make money? 

I won't apologize for expressing my opinion of KSA, trying to manipulate the market to put shale oil out of business few years back hurt a lot of folks, some lost their business's in West Texas over it. But it did make the industry stronger in the long run and run more lean. 

I am not defending KSA in the least! What I am saying is that while OPEC+ was trying to initiate production cuts to shore up the price of oil, during recent history, the US shale players did absolutely nothing to try and at least put a floor under the price. In fact, they kept ramping up production which simply ensured that the price remained depressed.

[Old-Ruffneck + 1,246]

20 minutes ago, Douglas Buckland said:

I am not defending KSA in the least! What I am saying is that while OPEC+ was trying to initiate production cuts to shore up the price of oil, during recent history, the US shale players did absolutely nothing to try and at least put a floor under the price. In fact, they kept ramping up production which simply ensured that the price remained depressed.

Understand that KSA needs and some others in the group need to shore up prices to 80$ on break-even 10$ or less oil. When you have only oil for your GDP your at the whim of the "free market" pricing and those that want to capture market share also. The world oil consumption has dropped radically, Venz, Iran, Libya are choked to a trickle. KSA even cut further while asking the rest of the members kill production. Is the market from Shale flooding that much?? I think not. So in a "free market'' atmosphere LTO is shipped out to refineries that can crack it, we here in US really aren't set up for it. We still import a lot of heavy crude that more than offsets the small amount we are exporting. I will say the next couple weeks will be interesting. Not sure how long it will take to ramp up from 6.6mbd to 12+mbd, guessing more than a month. If they want to sell for 25-30$ oil, I say buy it all and fill our reserves. 

[footeab@yahoo.com + 2,192]

On 3/11/2020 at 8:54 PM, surrept33 said:

 

It depends on your definition of free market. The US has a long tradition of both mercantilism and free market policies

https://en.wikipedia.org/wiki/Tariff_of_1789

I think most people would agree that free markets work better in general, but the efficacy of situational strategic interventions are a different matter. We've certainly had a long history of them.

At some point you must put your nations ability to be energy independent first.  Obviously in this case would require an import tariff.  If one accounts for inflation, then oil today, is cheaper than it has ever been in the history of the business. Say what you will about the state of the world, but in this aspect, humanity is doing well in regards to personal mobility all due to cheap oil.

[Douglas Buckland + 6,308]

1 hour ago, footeab@yahoo.com said:

At some point you must put your nations ability to be energy independent first.  Obviously in this case would require an import tariff.  If one accounts for inflation, then oil today, is cheaper than it has ever been in the history of the business. Say what you will about the state of the world, but in this aspect, humanity is doing well in regards to personal mobility all due to cheap oil.

In what universe would the US ever be energy independent? Shale oil is at best a stop gap.

[footeab@yahoo.com + 2,192]

1 hour ago, Douglas Buckland said:

In what universe would the US ever be energy independent? Shale oil is at best a stop gap.

Odd, I do recall you posting about loving ICE cars/motorcycles, or was I thinking of someone else?  Other options are? .... "x"  and do massive ropes come attached to sucking on those (.)(.)?    Yea.  Do you think the rest of the world loves being forced to worship Mecca? 

[Douglas Buckland + 6,308]

32 minutes ago, footeab@yahoo.com said:

Odd, I do recall you posting about loving ICE cars/motorcycles, or was I thinking of someone else?  Other options are? .... "x"  and do massive ropes come attached to sucking on those (.)(.)?    Yea.  Do you think the rest of the world loves being forced to worship Mecca? 

Can you try posting in a way that people can figure out what you are trying to say?

Yes, I am a fan of the internal combustion engine...what’s your point?

Ropes? Sucking? You lost me there.

How does supporting a realistic price of oil, which creates/saves jobs internationally, equate to worshiping Mecca?

[James Regan + 1,776]

2 hours ago, Douglas Buckland said:

Can you try posting in a way that people can figure out what you are trying to say?

Yes, I am a fan of the internal combustion engine...what’s your point?

Ropes? Sucking? You lost me there.

How does supporting a realistic price of oil, which creates/saves jobs internationally, equate to worshiping Mecca?

Douglas your not getting it until Shale oil began the USA had zero acreage in international regions, USA never abused its lust for oil. We have to forget that and realize that US oil was conventional land plays in the US until it wasn’t yielding and then Shale forget the rest in the middle it didn’t happen.

[James Regan + 1,776]

4 hours ago, footeab@yahoo.com said:

Odd, I do recall you posting about loving ICE cars/motorcycles, or was I thinking of someone else?  Other options are? .... "x"  and do massive ropes come attached to sucking on those (.)(.)?    Yea.  Do you think the rest of the world loves being forced to worship Mecca? 

Must be mistaken identity, strange post just strange...

[Douglas Buckland + 6,308]

1 hour ago, James Regan said:

Douglas your not getting it until Shale oil began the USA had zero acreage in international regions, USA never abused its lust for oil. We have to forget that and realize that US oil was conventional land plays in the US until it wasn’t yielding and then Shale forget the rest in the middle it didn’t happen.

Selective memory Jimmy....

[Ward Smith + 6,615]

13 hours ago, George8944 said:

Petrodollars is what secured us as a reserve currency after we abandoned the gold standard.  Countries would sell us their products in dollars so they could buy oil.   We got cheap goods and the ability to dictate interest rates and prices around the world.  It’s been a good deal until we started printing too much money and spending like debt doesn’t matter.

There is more money in circulation outside the US, than inside.  That’s in part due to the petrodollar effect.

Trust me, I'm well aware of the petrodollar effect. I've written about it multiple times here and elsewhere. 

It's the "outside" money that's the problem. We benefited from being the world Reserve currency, but it forced us to run the printing press flat out, as other countries like China opened their presses. @0R0 has talked about this in some detail, with graphs. I'm still waiting to buy his book when it comes out, or hell, I'll even be his proofreader if he wants.