Oil Apocalypse . . . . Putin said, "Nyet" to Mohammed bin Salman

[Sig Sackewitz + 1]

On 3/6/2020 at 8:23 AM, BLA said:

I think Putin understood that even a 1.5 million bbl cut would do nothing more than temporarily support oil price.  Russia probably tried to force a deal in exchange for their cooperation

Just like they received a sweetheart deal at the December OPEC meeting. Their condensate no longer counts as oil (1.4 mm bbls/day)

Notice Russia's statements up to the actual meeting.  "We're fine with these oil prices" , .  .  .  "We can meet our budget obligations with oil (Brent) down to $42 ". .  .  .  .  "We will probably work with OPEC".  

These statement by Russia sounds like a wily  horse trader.  Russia definitely fishing for a deal.  

So don't count out a deal over the weekend.  Russia wants a deal before they make a public statement about support.  OPEC has no choice.  

The next question  : Is OPEC+  DEAD ?  or Is OPEC (without the +) DEAD or rendered ineffective.

Re U.S. shale : The shale producers debt/loans are reviewed and adjusted/renewed/terminated twice a year. This takes place in APRIL and OCTOBER.

Next month, April just might be the day (month) of reckoning.  Yes, this downturn is related to a once in a lifetime event. Yes, oil price will eventually bounce back.  By how much and when not sure.

There is estimated $200 Billion high yield debt that could be decimated.  What effect will that have on the U.S. economy ?

I think the banks and bond holders will stop this never ending cycle of life support for small and medium producers that recklessly destroyed their balance sheets years ago when the margins were fat.

Probably not going all come down in April. But will start in April.  The required processes will begin and the Buyers will get their lists out.  Could play out over six months to a year or more. 

Chevron, Conoco, Hess, Pioneer, Exxon get your checkbooks out

Yes to the above but as of EOB 3/9 WTI is $31/bbl and some forecast $20-$25/bbl. next week. Also, yes. Producers hate being slave to the speculators while at the same time...endorsing it. So they too must jump in and hedge their bets.

Edited March 9, 2020 by Sig Sackewitz

[Sig Sackewitz + 1]

4 hours ago, Ward Smith said:

Looks like Obama finally threw in the towel

Few presidents are close to directly responsible for any economy.

All the right (GOP) has is tax r e v e n u e cuts for their plutocratic sponsors, partying on more trillion$ of our kids money. 

Edited March 9, 2020 by Sig Sackewitz

[footeab@yahoo.com + 2,192]

39 minutes ago, El Nikko said:

In the imortial words of Greta Thunberg...."How dare you!"

Babylon Bee is top quality news reporting! I'd rank it close to CNN or The Young Turks.

The Babylon Bee claims neither fake, nor news.  Claim: 100% Satire.  Dry Comedy at its best. 

[El Nikko + 2,145]

33 minutes ago, Tomasz said:

I will only correct a certain thing because several people have claimed that the price of oil extraction in Russia is $ 45. This cost of oil extraction in Russia includes a new NDPS tax, levied on wells, which is the income of the state budget. The real (physical) cost of mining is around $ 15-30, depending on the age, location and location of the deposit. In addition, raw material revenues in Russia account for around 28% of the budget

https://pronpz.ru/neft/sebestoimost.html?fbclid=IwAR33sE858hYAO0kjZxm-KdHDsCXgpoZh95rkndp1LLga_wMmIPNIYcKHVMo

PS

 Such a curiosity that hardly anyone knows. Vladimir Putin has a PhD in economics and the subject of his work was the use of raw materials to improve Russia's economy and geopolitical position. The special secret is not that the work was written by a ghost writer but apparently Putin got to know it very thoroughly.

The fact in mate, the west has been lazy and arogant for years if not decades. In the old days the West had the best weapon, and that was a life of prosperity and freedom which was promised and that promise was kept for the baby boomers but as the years went by the same promise couldn't be kept for younger generations. It's probably a factor for all or most nations but it's highlighting a massive issue for almost all countries.

The west got lazy and out gamed and that is exactly why Trump is the president of the US

[El Nikko + 2,145]

3 minutes ago, footeab@yahoo.com said:

The Babylon Bee claims neither fake, nor news.  Claim: 100% Satire.  Dry Comedy at its best. 

I know sorry...it's troll media

[footeab@yahoo.com + 2,192]

23 minutes ago, Sig Sackewitz said:

Few presidents are close to directly responsible for any economy.

All the right (GOP) has is tax r e v e n u e cuts for their plutocratic sponsors, partying on more trillion$ of our kids money. 

The right(fiscal conservative tea party) mostly got voted out of office.  So currently, what you are calling the "right" is actually center and if we make this distinction then I 50% agree with you.   The only 50% I disagree with(solution) and which would take too long to type and does not fit this thread.

[footeab@yahoo.com + 2,192]

Just now, El Nikko said:

I know sorry...it's troll media

CNN/TYT are troll media.  Hrmm, yes as they actually claim to be journalists. 

I really love how the "progressive" love the unions and all other insane utopian leftists causes, TYT, is union busting its own employees currently....  😍😱

[footeab@yahoo.com + 2,192]

4 minutes ago, El Nikko said:

The fact in mate, the west has been lazy and arogant for years if not decades. In the old days the West had the best weapon, and that was a life of prosperity and freedom which was promised and that promise was kept for the baby boomers but as the years went by the same promise couldn't be kept for younger generations. It's probably a factor for all or most nations but it's highlighting a massive issue for almost all countries.

The west got lazy and out gamed and that is exactly why Trump is the president of the US

The "greatest" generation, voted in for themselves lavish pension plans, PAID FOR BY their children/grand children.  Not one of them paid for their SS/Medicare.  So, ultimate blame holds for the utopian fools who were riding the high of winning WWII.  This was meh~OK when everyone had ~4 children popped out by age 30.  Population exploded. 

The Boomers, repeatedly voted for themselves even MORE lavish pension plans, but only had 2.5 children. 

The Millenials, are just starting to vote and they on average have ~1.8Children or so currently and that by age 40!.... and this is in the USA with MUCH better demographics than in Europe.   Europe has what?  1.5 fertility rate or lower by anyone not named Mohammed... yea this is going to end well.... 

Of course the Tax base for future pension retirement plans are dying.  They were based on an EXPLODING population model that NEVER stopped exploding!!!  And was never paid for.  Was stolen off the backs of children.  Talk about immoral policies. 

[Ward Smith + 6,615]

6 hours ago, Enthalpic said:

Fake news.

And you continue to be the dullest tool in the drawer. Carry on

[Ward Smith + 6,615]

1 hour ago, footeab@yahoo.com said:

Of course the Tax base for future pension retirement plans are dying.  They were based on an EXPLODING population model that NEVER stopped exploding!!!  And was never paid for.  Was stolen off the backs of children.  Talk about immoral policies. 

@Sig Sackewitz reads your whole post as, "Trump's fault!". Cause obvious ya know? 

[Enthalpic + 1,496]

15 minutes ago, Ward Smith said:

And you continue to be the dullest tool in the drawer. Carry on

It was a joke, like trump, who uses uses that line for anything he dislikes - try to keep up old man.

[Enthalpic + 1,496]

https://www.politico.com/news/2020/03/09/donald-trump-obama-fake-news-tweets-124320

[Enthalpic + 1,496]

Looks like the prime demographic to die...

 

Edited March 10, 2020 by Enthalpic

[Enthalpic + 1,496]

Praise Jesus

[kshithij Sharma + 78]

8 hours ago, notsonice said:

Trump needs to step up and place anti-dumping tariffs on foreign crude. Oil and Nat gas production in the US is a national security concern same as steel and he should protect American Producers. He is letting foreign powers (Putin and MBS) take over a large part of the American economy.

Oil is limited in quantity and hence preserving oil is more important than protecting oil. However, US is now on energy independence which means that USA will not net buy oil from any outside source other than Canada. So, USA oil will not be affected. USA oil prices decline will be compensated by USA profits in other industry dependent on oil. One doesn't care for profit or loss in a self sufficient economy

[Bob D + 562]

6 hours ago, Sig Sackewitz said:

Few presidents are close to directly responsible for any economy.

All the right (GOP) has is tax r e v e n u e cuts for their plutocratic sponsors, partying on more trillion$ of our kids money. 

Sig

The Democrats have controlled the House for the last two years.  The House controls spending ... Period.  Each year the Dems have offered more spending than the President.  Remember when the government was almost shut down in 2018.  That was the President vetoing the Dems spending bill.  No President has had a balanced budget in over 50 years.  There are Congressmen and Senators who have voted for deficit spending for 20-30-40 years. 

Obama did it too.  And Bush, Clinton, Bush, Reagan, Carter

Your silence is deafening when Democrats spend.  

[surrept33 + 609]

3 hours ago, Enthalpic said:

https://www.politico.com/news/2020/03/09/donald-trump-obama-fake-news-tweets-124320

 

This sounds prudent:

Quote

The president, I don't believe he has a clue," she said. "And so I wish that he would allow our health officials and the CDC and all of those who know what they're talking about, who are being transparent, to conduct this response. This is an emergency, and the experts know exactly how to respond. The president of this United States of America does not."

That being said, coronavirus doesn't seem to have affected his popularity any. I think that's too hard to change either way at this point: https://projects.fivethirtyeight.com/trump-approval-ratings/

I'm sure Trump is afraid of a sustained slowdown going into November however. That's one of the few things that can hurt incumbents. Potentially bad timing for him.

Edited March 10, 2020 by surrept33

[Marcin2 + 726]

What if Putin just found opoortunity to punch above his weight. 4-5 billion monthly cost of current prices for Russian economy. Scenario: assume Russia keeps this deliberately for 6 months - nothing important happens in Russian economy, plus his Chinese masters are happy.

What would happen globally ?

US, Gulf countries. They would remember Putin move, take him seriously, calculate his backlash into future actions.

[Douglas Buckland + 6,308]

9 hours ago, wrs said:

It's spread across all producers.  When flaring happens it's because either they aren't hooked to a gas pipeline or there isn't space on the pipelines.  Right now gas is so cheap it's a loss to put it in the pipeline.  That's basically a varition on the second reason.  No one wants to flare gas but if the wells were drilled to produce oil then the gas is a by product and if it can't be sold, has to be disposed of and flaring is the most efficient way.  Saudi Arabia flares much more than the shale producers.

Or, if there is no way to handle the associated gas....YOU DO NOT ISSUE A DRILLING PERMIT!

[Marcin2 + 726]

1 hour ago, Douglas Buckland said:

Or, if there is no way to handle the associated gas....YOU DO NOT ISSUE A DRILLING PERMIT!

I would do it through taxation. For each company engaged in flaring, variable fee lets say 10 dollars per extracted barrel of oil. Just an environmental fee. financial burden for wasting natural resources. And the revenues for some Noble cause like oncology healthcare for children so that it is set in stone.

[Andrew Neopalimy + 14]

If Trump accepts the official invitation to visit Moscow to celebrate the 75th anniversary of the USSR’s Great Victory over European National Fascism, in April at the Extraordinary OPEC meeting Russia will agree to maintain (not reduce) the recovery volumes.

PS And the president of Great America will also win his next Great Victory / make another Great Deal and save the World again! )))

Edited March 10, 2020 by Andrew Neopalimy

[Douglas Buckland + 6,308]

Okay, let someone else go to the 75th anniversary celebration and save the world, no problem there! Who do you recommend?

[J.mo + 165]

Saudis boosting output to 12.3m/day according to Aramco ceo

[Uvuvwevwevwe Onyetenyevwe Ugwemuhwem Osas + 96]

12 hours ago, Gerry Maddoux said:

Right, and that's precisely where we should get it. We should, in my opinion, tell Saudi Arabia to go piss up a rope, slap a 25% tariff on their oil, and buy from Canada and Mexico--even Venezuela if we have to. I can tell you right now that Trump would gain at least a couple million votes if he'd do that. 

I think a 25% tariff (to start with) on all US petroleum imports except Canada/Mexico is not unreasonable.
Preserving domestic industries is important because foreign suppliers can jack up the price as soon as domestic
industries shut down.  I think all or almost the US tariffs on China and also the steel/aluminum tariffs should be permanent,
because again, after all your domestic industries shutdown (due to cheap foreign imports), then those foreign companies
can jack up the price, once they have a monopoly on global production.

In the short term, there is economic benefit to buying everything from the cheapest foreign suppliers.
But long term, it results in a lot of problems: global monopolies or cartels, occasional price gouging, foreign political infuence,
A lack of domestic jobs increases social costs (crime, police, jails/prisons, courts, welfare, city blight) which economists usually ignore.

[Rasmus Jorgensen + 1,169]

14 hours ago, wrs said:

The problem in the market right now is that KSA and Russia are both fighting for the same market

Not really. The problem is that world consumes less oil than it produces.