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Saudis to cut 4mm bbls. What a joke.

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(edited)

More smoke and mirrors .  

Saudis produced 9.8 mm before OPEC deal fell apart.

Saudis say they are going to produce 12.3 in April.  That is a joke.  

Saudis say they will cut 4 mm/d if they can use inflated base.

So in reality  will cut from 9.8 mm (actual production march) to 8.3 (12.3 - 4mm) or really only 1.5 mm .  This while April surplus is estimated to be 30 mm/d.   LOL , too funny.  

First the Saudis won't get near their 12.3 estimate.production in May.

WHEN WILL PEOPLE REALIZE CUTTING PRODUCTION IS A SCAM.  THE ONLY CHANCE THEY HAVE TO CONTROL SUPPLY IS TO CUT AND ENFORCE EXPORTS.

ITS THE EXPORTS STUPID

Even if no deal signed Saudis will have to cut production down to at least 8 mm/d .  THERE IS LITTLE STORAGE CAPACITY AVAILABLE.

U.S. estimated to have already cut between 1.5mm to 2mm.  It is estimated that Cushing storage will be full by the middle of May.  

By the way any word from Trump about stopping the Saudis dumping 14 mm bbls on the U.S.  that is on its way ?  

I can't understand why Trump is afraid of  Bin Salman.  The Saudis must have some dirt on Trump or his businesses.  Unfortunately , Biden might be the only alternative.

Trump better wise up.  Inaction will hurt his reelection.  Texas has no choice but to vote for him.  But if he allows Saudis and Majors to bankrupt shale it will have implications well beyond Texas

 

Edited by BLA

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Pretty sure Saudis were EXPORTING 7M before everything fell apart? So there essentially reclaiming 1.3M of sales. Russia wont make it to the 2M barrel haircut. But hey it's just talk and some cooperation to raise prices as opposed to complete and total flooding.  Brazil Norway Canada and USA are reducing Colombia Mexico too... every bit helps. I think we should focus on preventing damage to the entire oil industry to avoid a future price spike. I like free markets and all but when the entire system breaks down and we all suffer it's far worse than more debt and some higher taxes. No one is prepared for a system reset. 

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(edited)

21 minutes ago, Rob Kramer said:

Pretty sure Saudis were EXPORTING 7M before everything fell apart? So there essentially reclaiming 1.3M of sales. Russia wont make it to the 2M barrel haircut. But hey it's just talk and some cooperation to raise prices as opposed to complete and total flooding.  Brazil Norway Canada and USA are reducing Colombia Mexico too... every bit helps. I think we should focus on preventing damage to the entire oil industry to avoid a future price spike. I like free markets and all but when the entire system breaks down and we all suffer it's far worse than more debt and some higher taxes. No one is prepared for a system reset. 

Why delay the inevitable, at the cost of yourself on both ends. You pay for the "balancing" up front and down the line in price increase also. 

Eventually conventional business practices will shake themselves down. Land will be re sold at lower price, labor rates decrease, royalty percentages decrease, service companies reduce price, trucking, etc etc. 

If your product is not as valuable as it once was, natural practices of business follow. If the price increases down the line, then you are ahead of the game and your profit comes as your expenses are lower. Why is it that the oil industry always gets their cake and eat it too? Ever heard of double penetration? That's what everyone gets from the oil industry. 

Edited by J.mo
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Not how i have seen it work recently. More like companies cant afford services debt stacks rigs drop production drops. Think your talking about business moving to cheaper countries... but oils stuck in the ground it's in. Your not getting an oil man at 7$ /hr working a multi million doller rig and frac fleet. Or sand and fracking stuff by the ton for cheaper. 

The only one getting their cake is those at the top. Pretty sure if half the oil companies flop because they spend money like everyone else on the planet with a debt doesn't matter mindset everyone will loose when oil is 200$. And electricity is 3x more and they switch back to coal and renewables are the "cheap" option that we cant afford. Same with EV's. Inflation like crazy from shipping and fuel costs....

Why do you think oil companies are taking advantage of us? You have the option to buy electric.  I know 3 oil companies on the tsx that are debt free .... and they act ultra conservative.  Does this sound like the MOST profitable sector? You describe them like every other business then say they have all the advantages.... doesn't add up. They get bailout like planes trains and automobiles hotels civilians ect. Please explain get their cake and eat it too in relation to other sectors receiving the same or more help. The sectors USING the hydro carbons calling them bad. 

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(edited)

2 hours ago, BLA said:

More smoke and mirrors .  

Saudis produced 9.8 mm before OPEC deal fell apart.

Saudis say they are going to produce 12.3 in April.  That is a joke.  

Saudis say they will cut 4 mm/d if they can use inflated base.

So in reality  will cut from 9.8 mm to 8.3 or really only 1.5 mm when the surplus is estimated to be 30 mm/d.   LOL , too funny.  

First the Saudis won't get near their 12.3 estimate.

WHEN WILL PEOPLE REALIZE CUTTING PRODUCTION IS A SCAM.  THE ONLY CHANCE THEY HAVE TO CONTROL SUPPLY IS TO CUT AND ENFORCE EXPORTS.

ITS THE EXPORTS STUPID

Even is no deal signed Saudis will have to cut production down to at least 8 mm/d .  THERE IS LITTLE STORAGE CAPACITY AVAILABLE.

MbS a big con.

By the way any word from Trump about stopping the Saudis dumping 14 mm bbls on the U.S.  that is on its way ?  

I can't understand why Trump is afraid of Mohammad Bin Salman.  The Saudis must have some dirt on Trump or his businesses.  Unfortunately , Biden might be the only alternative.

Trump better wise up.  Inaction will hurt his reelection.  Texas has no choice but to vote for him.  But if he allows Saudis and Majors to bankrupt shale it will have implications well beyond Texas

Even worse is analyst like RBC continue to parrot the OPEC talking points instead of doing in-depth real analysis.  

Once again another brilliant move by MBS .   LOL.  

"Historical" production cuts .  Oil goes from 12% up to - 3% down

Whatever MBS proposes take the other side of that investment.

MBS contrarians are making a killing 

IF YOU WANT TO CONTROL SUPPLY CUT EXPORTS.

CUTTING PRODUCTION IS A JOKE

Edited by BLA

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Interesting fact- A gallon of Gasoline is cheaper in KSA than a gallon of Water.

 

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(edited)

The production cuts by OPEC++ would have come one way or another—whether in a planned fashion or out of necessity as the bottom continues to fall out of demand and as storage fills. This, however, allows the group to determine exactly which countries are tasked with cutting what, and allows the group to declare a subdued victory. An even bigger victory might have been agreeing to a production cut deal over a month ago as planned.

Me Thinks JULIANNE  is correct.

Edited by James Regan

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1 hour ago, BLA said:

Trump better wise up.  Inaction will hurt his reelection.  Texas has no choice but to vote for him.  But if he allows Saudis and Majors to bankrupt shale it will have implications well beyond Texas

Unfortunately, Mr. Trump is enamored with Big. And big means Chevron and Exxon, both of whom are lobbying against tariffs because they have a vested interest in seeing small to medium shale companies bite the dust, from which they can be had for the price of picking them up. 

I don't believe Mr. Trump has an "oil whisperer" telling him a noble truth: that if he does nothing, pretending a win from an OPEC++cut of 10 M bod, the price of WTI will fall to well less than $10, about a million people will lose their jobs forever, and he will lose Texas. 

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(edited)

50 minutes ago, Gerry Maddoux said:

I don't believe Mr. Trump has an "oil whisperer" telling him a noble truth: that if he does nothing, pretending a win from an OPEC++cut of 10 M bod, the price of WTI will fall to well less than $10, about a million people will lose their jobs forever, and he will lose Texas.

Gerry I think your 100% correct in all honesty, in reality this situation is like nothing we have seen before across the whole industry, its no longer a Shale or Conventional thing, its bigger than oil. Any mitigation will be like pissing in the wind. All sectors are backing out at this moment, the price of oil is irrelavant at this point, everyone has been seriously spooked. Catch22, I think you quoted 2 years on an export ban in another thread. Rigs on solid 3 year contracts are being entered into Force majeure every day with instant cold stack and lay offs, these deepwater drillships can't just be stopped and started they can cost up to 35 Million USD just to get started if stacked cold for a year.

For these companies to take these decisions  so soon after the last bust when they have just this year brought the same units back from cold or warm stack is almost a death blow.

This will get ugly for everyone for the next year. A big reset is required before people start launching missiles. Cool heads must prevail as we look like we have hit the self destruct button at the moment.

Respectfully

Edited by James Regan
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Russia is making demands which will be very difficult and painful,  but as storage fills up and prices collapses to under $10 Trump will sign. So typical of Putin that his timing and strategy are always "no choice but you sign the document".

"Russia does not consider a supply reduction driven by falling demand or lower prices to be a real output cut within the parameters of the proposed OPEC+ deal, the Kremlin said on Wednesday. It was the first statement from Moscow about this crucial aspect of the talks and indicated that President Vladimir Putin may be expecting a more significant contribution from the U.S. than his counterpart Donald Trump is willing to give.

“You are comparing the overall demand drop with cuts aimed at stabilizing the global market,” Kremlin spokesman Dmitry Peskov told reporters at his daily conference call, when asked if Russia would accept U.S. production cuts driven only by market forces. “These are completely different things.”

Washington has so far offered what officials described as “automatic” and “market-driven” cuts, which are expected to happen as companies from Exxon Mobil Corp. to independent shale explorers slash spending in response to low prices."

https://finance.yahoo.com/news/russia-skeptical-u-contribution-global-104345605.html

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 I thought it's an open market!

 

Why you are blaming Saudi while you have too many producers other than Saudi. The cut on oil production was proposed before when Saudi was at 9.8 mm/day during OPEC + Russia meeting. All OPEC members agreed to reduce their production while Russia refused. So Saudi had to maintain their market share.

 

What Saudi done is completely logical and it their right. Always, US adminstration look at Saudi when it comes to stabilize the market, but when it comes against some companies interested you start blaming Saudi.

 

Saudis don't control the market, it basically supply and demand law. Saudis are lucky to o have the cost of production lower than most of US Oil Companies.

 

Let's be honest and not blaming Saudi for everything happens in the oil market on them.

 

Regards, 

Moe

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2 hours ago, James Regan said:

Interesting fact- A gallon of Gasoline is cheaper in KSA than a gallon of Water.

 

Actually they subsidize bottled water quite a bit too. I think I paid $2 for a 5 gallon bottle. Tried to avoid the stuff out of the tap.

Right now gasoline at the pump in my area of Texas is slightly cheaper than at the pump in the KSA now. Which I find truly amusing.

They used to seriously subsidize gasoline. They removed the heavy subsidies. Of course there aren't excise taxes on gasoline, so their current 205 hallas per liter is actually more than we pay at the pump. By most countries standards KSA gas is quite cheap. I think it effectively 60 cents a gallon when I got there. One of the things MBS has gotten right is weaning themselves off the massive energy subsidies. It messes with their electrical system as well.

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