CERAweek Meeting

Saudi Arabia's Former Oil Minister Says Don't Worry About Demand - Saudis look to develop mining sector.

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I guess we all want to hear how aggressive US shale is going to play it this time around...

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The meeting is not about prices or production cuts but more about technology and outlooks.

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Aggressive indeed. Higher tech, more production, Fatih Birol saying US is going to meet 80% of the demand growth in the next few years, and be producing more than 12 million bpd. While OPEC and Russia have their hands tied, the US will step in to meet the demand. That 80% of the demand growth that the US will be meeting will be mostly in the form of exports. And this is not a collective effort, it's merely the market demanding and the free market stepping in to fill that need. 

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Notable increases in US exports will cause those countries to rethink their reduced production volumes.  The CERA gathering participants will be well aware  of the potential for short and medium term loss of market share.

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7 minutes ago, pipeliner1 said:

Notable increases in US exports will cause those countries to rethink their reduced production volumes.  The CERA gathering participants will be well aware  of the potential for short and medium term loss of market share.

And honestly I think some of these countries are happy to give up some market share in exchange for higher prices (clearly, or they wouldn't be doing it). Saudi is willing to give up some market share to raise prices to a level that will generate a windfall for its upcoming IPO of Aramco. Russia has benefited from significant deals with Saudi Arabia--I'm sure in exchange for its cooperation and support of the deal. Venezuela, Libya, and Nigeria couldn't care less because they can't produce more right now anyway. 

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Saudi Aramco president and CEO Nasser noted that strong economic growth in emerging and developing markets, an additional two billion energy consumers by 2050, plus new non-combustible uses for oil, will continue to drive demand for hydrocarbons.

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4 minutes ago, franco said:

Saudi Aramco president and CEO Nasser noted that strong economic growth in emerging and developing markets, an additional two billion energy consumers by 2050, plus new non-combustible uses for oil, will continue to drive demand for hydrocarbons.

Does anybody have reliable details on those "new non-combustible uses for oil" ???

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1 minute ago, SRE said:

Does anybody have reliable details on those "new non-combustible uses for oil" ???

plastics, fabric

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BP CEO Bob Dudley @CERAWeek: "We need governments, in our opinion, to put a price on carbon."

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Unless OPEC & Russia bring prices down to about $40/barrel, they will keep losing market share. This level however will not generate the revenues they need to finance their budgets. 

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39 minutes ago, TomTom said:

BP CEO Bob Dudley @CERAWeek: "We need governments, in our opinion, to put a price on carbon."

The market should put a price on carbon. Oh wait...it has.

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Speaking at CERAWeek Energy Secretary Perry said he is 'not sure' President Trump has finished making up his mind on levying tariffs on imported steel and aluminum. About future of fossil fuels he told: "We would welcome and help lead a global alliance of countries willing to make fossil fuels cleaner rather than abandoning them".

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CEO of Shell, 1 of the world's biggest oil and gas companies: "There are plenty of questions facing our industry. The ongoing impact of shales. OPEC. The debate on LNG supplies. Geopolitical shifts. Plenty of questions. But I believe the biggest of them is climate change"  Many speakers do not offer any conclusions. I did'n t see. " we have to...." 

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1 minute ago, franco said:

CEO of Shell, 1 of the world's biggest oil and gas companies: "There are plenty of questions facing our industry. The ongoing impact of shales. OPEC. The debate on LNG supplies. Geopolitical shifts. Plenty of questions. But I believe the biggest of them is climate change"  Many speakers do not offer any conclusions. I did'n t see. " we have to...." 

I hope they are talking about pipelines. And I don't mean whining about the steel tariffs. About rebranding and what they need to do to keep pipelines from being the ugly red-headed stepchild

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(edited)

On ‎06‎/‎03‎/‎2018 at 6:18 PM, pipeliner1 said:

Notable increases in US exports will cause those countries to rethink their reduced production volumes.  The CERA gathering participants will be well aware  of the potential for short and medium term loss of market share.

What's the use of going for market share when price times volume gives you less revenue than you had before? Saudi Arabia in 1986 and 2014: hurting themselves in order to hurt others. There is no great customer loyalty. Oil is a commodity, not a car or a perfume brand. There are also even traders in south east Asia blending synthetic Brent or synthetic WTI for you now, or any blend you want.  

Edited by Johnecon
Repetition of "now" in last sentence. I have high standards..
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The primary consideration for oil exporters participating in production curtailment is their level of oil revenues. Consequently, they will stop defending the oil price when the ratio of the decrease in their supply becomes greater than the marginal increase in the oil price resulting from the decrease in supply. However, the main loss for those producers will be in market share. 

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