The GREAT OPEC+ Agreement

[Jan van Eck + 7,558]

17 hours ago, nsdp said:

PADDIII refineries are designed for heavy imports.

Didn't those guys originally configure to run Venezuelan Heavy in there?   I was under the impression that was why Washington kept handing out "waivers" to allow those refineries to by-pass the Sanctions on Venezuelan crude. 

[Geoff Guenther + 317]

On 4/10/2020 at 2:28 AM, Jan van Eck said:

We blew right through that 20% number already, in unemployment claims, here in sleepy Vermont.  The numbers have crushed the intake computer capabilities, so no one knows how many are unemployed, probably at the 30% end.  That is huge.  What then happens is that the State itself rapidly runs out of cash, as income tax receipts, sales tax receipts from the locals and tourists  (the rooms and meals tax), and excise taxes on gasoline and diesel not purchased, strangles the State Government cash flow.  Meanwhile on the expense side of the ledger the costs for the Health and Human Services skyrockets.  The State thus has to go out there into the commercial lending market and go borrow.  With what collateral?  None.  

Resurrecting a rural, vacation economy from 30% unemployment is going to be a huge exercise.  I don't see it.

Resurrecting the entire economy is going to be a huge exercise and require a massive amount of creativity.

On the other hand, if the average American takes two months of work off, they will still be working about the same number of annual hours as your average Western European. Given half of us have been temporarily idled it might be a good time to think about our priorities. 

For all of our talk a lot about "work smarter, not harder" we've stopped gaining efficiency but have just been getting people to work longer hours. There's no reason I see that America couldn't institute a 6-week holiday and maintain a very good lifestyle at the same time.

[Douglas Buckland + 6,308]

“There's no reason I see that America couldn't institute a 6-weekholiday and  maintain a very good lifestyle at the same time.”

Why should we do that? Cutting a month and a half out of the ‘work year’ and asking businesses to absorb the cost sounds like a good way to become uncompetitive and inefficient.

Putting European values to a totally foreign lifestyle/culture is not logical.

[William Sol + 9]

Somehow we keep telling ourselves that the Saudis are our friends.  Why are we selling arms & supporting this corrupt regime and their unwinnable war vs the Houthis? Why is the US Govt worried about "state secrets" when it comes to the current lawsuit vs KSA by the Families of 911 victims?

Quote

The president promised to help. “It’s done,” he said, reassuring several visitors. Later, the families were told that Trump ordered the attorney general, William P. Barr, to release the name of a Saudi diplomat who was linked to the 9/11 plot in an F.B.I. report years earlier. Justice Department lawyers handed over the Saudi official’s name in a protected court filing that could be read only by lawyers for the plaintiffs. But Barr dashed the families’ hopes. In a statement to the court on Sept. 12, he insisted that other documents that might be relevant to the case had to be protected as state secrets. Their disclosure, he wrote, risked “significant harm to the national security.”

I could give a f*ck whether that region is dominated by Shia or Sunni. Who has caused more harm to the US?  Iran or KSA?  Its time to use whatever leverage we have.  KSA is not our friend and Fredo Bin Salman is not a credible ally.

https://www.nytimes.com/2020/01/23/magazine/9-11-saudi-arabia-fbi.html

Edited April 13, 2020 by Tom Kirkman
Moderator edit - putting the * back in f*ck since 2017

[Dan Warnick + 6,100]

4 minutes ago, Douglas Buckland said:

“There's no reason I see that America couldn't institute a 6-weekholiday and  maintain a very good lifestyle at the same time.”

Why should we do that? Cutting a month and a half out of the ‘work year’ and asking businesses to absorb the cost sounds like a good way to become uncompetitive and inefficient.

Putting European values to a totally foreign lifestyle/culture is not logical.

Douglas, seriously?  Are you forgetting how much corporate USA has taken away from U.S. workers in the name of profits, profits, profits?  How they say they don't have money to give COL increases year after year all the while doing stock buy-backs to pump up the stock price and therefore the C-suite's bonus checks and stock option award values?  How keeping COL increases off the table for 1,000 or whatever number of workers will increase the profit margin from 23% up to 23.5%, HURRAY!  I know (C-suiter talking here), let's move production overseas, lay off that 1,000 workers and we'll get to take even more!  We all (up here on the C-suite floor) win!  Yeah!

Come on man, we're working ourselves literally to death by the time we should be retiring comfortably or, worse still, being put out to pasture long before we've been able to pay off the mortgage and get the kids through Liberal Arts degrees.  Mandate 6 week paid vacation time for 15+ years of service.  We could work it out.

[Jan van Eck + 7,558]

9 minutes ago, William Sol said:

Edited 4 minutes ago by Tom Kirkman
Moderator edit - putting the * back in f*ck since 2017

I had to laugh when I saw this.   Tom would be exasperated by New York today.  Real conversation I overheard, one New Yorker to another:

"I have two words for you:  Shut the F*#% up!"    

To a New Yorker, that is only two words.  Amazing stuff. 

[BradleyPNW + 282]

26 minutes ago, Geoff Guenther said:

On the other hand, if the average American takes two months of work off, they will still be working about the same number of annual hours as your average Western European. Given half of us have been temporarily idled it might be a good time to think about our priorities. 

Managers and workers who can transition to remote management will inherit the post-apocalyptic Earth. 

[Refman + 207]

1 hour ago, Jan van Eck said:

Didn't those guys originally configure to run Venezuelan Heavy in there?   I was under the impression that was why Washington kept handing out "waivers" to allow those refineries to by-pass the Sanctions on Venezuelan crude. 

PAD III definitely has a lot of refineries configured for Ven crude. The loss of those barrels, as well as the decline in output from PEMEX has been tough on those that invested heavily in high conversion refineries. Keystone XL would have been a great relief.

Thought the waivers were for businesses (Chevron) to operate in Venezuela, not for importing the crude.

[Jan van Eck + 7,558]

9 minutes ago, Dan Warnick said:

Come on man, we're working ourselves literally to death by the time we should be retiring comfortably

I remember I was at one supplier talking to their chief purchasing agent, he had a Department with six men under him.  This was in Pennsylvania, near Harrisburg.  I visited again a few years later and he was the only man left standing, doing the work of all seven.  He was seriously pressed.  He wanted me to take over not just the parts I was selling them, but also parts from other suppliers, and then do the finish work and assembly work and ship him the finished assembly, all boxed so that they could re-ship and sell to their customers without having to touch the stuff.  The only reason he wanted that was so that he would not have to deal with having to purchase all the various parts, he no longer had the time to stay on top of it.  I really felt sorry for the guy; he was at an age, I think about 47, where he could no longer afford to walk, would have big problems getting another job.  

[Jan van Eck + 7,558]

1 minute ago, Refman said:

Thought the waivers were for businesses (Chevron) to operate in Venezuela, not for importing the crude.

they allowed for import of the crude, but it fell apart when the payments ended up frozen, and also the Venezuelans ran into problems running the pumps.  Oh, well.  We can always hope for another Revolution.   

[Refman + 207]

Just now, Jan van Eck said:

they allowed for import of the crude, but it fell apart when the payments ended up frozen, and also the Venezuelans ran into problems running the pumps.  Oh, well.  We can always hope for another Revolution.   

Well technically you can still import Ven crude, as long as the payments go to the account controlled by Guido and not Maduro. Obviously Maduro not a big fan of exporting to places that pay Guido and not him 😀

The revolution down there is long overdue

[Jan van Eck + 7,558]

5 minutes ago, Refman said:

The revolution down there is long overdue

Maybe the US could reach back to the British practice of 1812, and issue "Letters of Marque," granting the Holders thereof the right to be pirate commerce raiders, to seize tankers at cannon-point pulling out of Maracaibo Bay and towing them over to Houston, there to have the cargo unloaded into those refineries......    Hey, Errol Flynn could make a movie!

[BradleyPNW + 282]

The Carnival Barker is back at it again, "Trump Wants OPEC+ To Double Its Production Cut" 

https://oilprice.com/Energy/Energy-General/Trump-Wants-OPEC-To-Double-Its-Production-Cut.html

[Mississippi Bubble + 2]

Could you explain me, why Goldman Sachs is basically dominating all the negative oil price news over the recent weeks? What makes their analysts to sure about the price going to drop lower? And the cut not being sufficient? Do they have a hidden interest in low oil prices, low oil company stocks? Even bankruptcy? Are they planning to buy into the market now, while everyone panics? Arent JP Morgan, Wells Fargo... totally invested into shale companies? Is it likely that the big economies US, China... will delay their production for another month? Or will we overcome the Covid 19 and kickstart the economy quicker than expected? And who will benefit then?

Any thoughts?

[Boris Guskov 0]

"Could you explain to me why Goldman Sachs is basically dominating all the negative oil price news"

After a day of trading, the Goldman (& Citi) crude oil bearishness due to the OPEC+ "too little & too late" production reduction hasn't seemed to influence the traders.  The Brent is even up 60 cents as I type.  Maybe Citi and Goldman are wrong or maybe it'll take a week or two.  Is it possible that their analysts really are trying to evaluate the market but thus seem "negative" to some?  Should they instead be "thinking positively" to help keep oil prices higher?

Edited April 13, 2020 by Boris Guskov

[nsdp + 449]

4 hours ago, Refman said:

Well technically you can still import Ven crude, as long as the payments go to the account controlled by Guido and not Maduro. Obviously Maduro not a big fan of exporting to places that pay Guido and not him 😀

The revolution down there is long overdue

Considering it was the "well to do" class of presidents(Andreas Perez(2 times), Lusinchi, Herrera Campins  pocketed 80% of revenue from PDVSA for themselves and their compadres, They were  Guaido's buddies of Democratic ActionVenezuela that nationalized US oil holdings in 1976.   Betencourt and  Leoni and maybe Caldera are the only relatively honest elected presidents  in the last 150 years in Venezuela. 

Guaido is as corrupt as Maduro maybe more so depending on what his family's share of the take  was between 1976 and 1993.  There are two ethnic groups Creoles (white) and Pardo (mixed race-Indian, black and white). Guaido is white and Madero is Pardo.  Guaido just happens to be the "US sponsored" crook even though his political group was the one that nationalized US oil in 1976.

Bring back Betencourt.  Oh yeah he's dead.

Edited April 13, 2020 by nsdp

[Gregory Purcell + 94]

4 hours ago, Jan van Eck said:

Maybe the US could reach back to the British practice of 1812, and issue "Letters of Marque," granting the Holders thereof the right to be pirate commerce raiders, to seize tankers at cannon-point pulling out of Maracaibo Bay and towing them over to Houston, there to have the cargo unloaded into those refineries......    Hey, Errol Flynn could make a movie!

It's hard to believe the US Naval Institute published this article.

Unleash the Privateers!

The United States should issue letters of marque to fight Chinese aggression at sea.

By Colonel Mark Cancian, U.S. Marine Corps (Retired) and Brandon Schwartz

April 2020

 

Naval strategists are struggling to find ways to counter a rising Chinese Navy. The easiest and most comfortable course is to ask for more ships and aircraft, but with a defense budget that may have reached its peak, that may not be a viable strategy. Privateering, authorized by letters of marque, could offer a low-cost tool to enhance deterrence in peacetime and gain advantage in wartime. It would attack an asymmetric vulnerability of China, which has a much larger merchant fleet than the United States. Indeed, an attack on Chinese global trade would undermine China’s entire economy and threaten the regime’s stability. Finally, despite pervasive myths to the contrary, U.S. privateering is not prohibited by U.S. or international law....

 

https://www.usni.org/magazines/proceedings/2020/april/unleash-privateers?fbclid=IwAR0z5cNrUgG5N-MSdDElI9ee944MjjrqIi4ea6Fo3PgEEqRcXzUY0Ddzrgc

[Jan van Eck + 7,558]

1 minute ago, Gregory Purcell said:

Finally, despite pervasive myths to the contrary, U.S. privateering is not prohibited by U.S. or international law....

I think the retired colonel is looking for a new line of work!

[BradleyPNW + 282]

From what I can gather so far, here's what happened:

1) Russia buckled. As usual, Russia was claiming to have a stronger hand (diversified economy) than they actually had. According to state run Russian media, Igor Sechin (Rosneft) argued for the oil war. However, the great and all-wise Vladdy Putin is the sober voice who stepped in to save the day and negotiate with KSA. Reality: Russia played chicken with KSA and lost. 

2) KSA is running a victory lap. They wanted cuts back in February but Putin tried to pull a power play. Putin failed bigly which is going to force RUS to move toward KSA and away from IRI. Waiting to see how bad Putin was hurt, we'll know by watching to see if he fires Sechin or not. If Sechin gets fired, Putin was badly hurt. 

3) Mexico's new energy bigwig wasn't playing ball and Donald helped soften the blow of Mexico backing down. 

I think it's funny to read comments along the line of "Donald please save us." No, dudes. Putin was pulling the stings on the deal, not Dear Leader. Watching Donald call for deeper cuts now just makes me laugh. He was never a playa. He ain't gonna save ya. 

Desperate people tend to believe signs in their favor. Shale will see the price cuts as a lifeline. When they realize it isn't Texas Railroad might try to step in. Even if they do, that save shale either. It's over for current investors. Lenders will seize the assets. New investors will come along and buy them from the banks in a year or two. The new shale industry will spring up and do well, maybe better. 

Texas communities that lean on shale are going to learn a very hard lesson about social safety nets. Texas refused to expand Obamacare so all the Texans who wind up unemployed are going to lose their health insurance. 

One potential blowback: Shale is proposing government interventions to save their investments that Greenies proposed to kill it. Greenies do it to reduce carbon, Shale does it to support prices. It's possible Democrats could go along with some of those interventions now then turn the tables in the future. Sort of like a Trojan Horse. When you're desperate, though, those kinds of things happen. 

Edited April 13, 2020 by BradleyPNW

[Gregory Purcell + 94]

28 minutes ago, BradleyPNW said:

1) Russia buckled. As usual, Russia was claiming to have a stronger hand (diversified economy) than they actually had. According to state run Russian media, Igor Sechin (Rosneft) argued for the oil war. However, the great and all-wise Vladdy Putin is the sober voice who stepped in to save the day and negotiate with KSA. Reality: Russia played chicken with KSA and lost. 

 I don't see how Russia backed down,  they got what they asked for, the price WTI is not going back over $30 any time soon, Oil is in a price range which works for Russia, but not for KSA or most shale producers.   Also the Kremlin doesn't expect the Trump administration to live up to the deal.    The Kremlin has called first Obama then latter Trump “недоговороспособны”.  What that word means is literally “not-agreement-capable” or unable to make and then abide by an agreement.  While polite, this expression is also extremely strong as it implies not so much a deliberate deception as the lack of the very ability to make a deal and abide by it. 

[Michael Jones + 34]

You should all be following what is going on in China.  There are clear signs of pick up of industry. Interesting the cities like Shanghai and Beijing appear slower.  This is from tracking traffic congestion, PM2.5 numbers, Mobile phone movements, oil ad gas imports and refinery runs.  Ive said before China has not cut its oil imports so is stockpiling it whilst it is cheap.  Always looking long term.  Worked here over 20yrs.  Please note that most of the PRC citizens are like you and me (I'm a Brit).  We are lucky to come from countries with democracy.

[Douglas Buckland + 6,308]

10 hours ago, Dan Warnick said:

Douglas, seriously?  Are you forgetting how much corporate USA has taken away from U.S. workers in the name of profits, profits, profits?  How they say they don't have money to give COL increases year after year all the while doing stock buy-backs to pump up the stock price and therefore the C-suite's bonus checks and stock option award values?  How keeping COL increases off the table for 1,000 or whatever number of workers will increase the profit margin from 23% up to 23.5%, HURRAY!  I know (C-suiter talking here), let's move production overseas, lay off that 1,000 workers and we'll get to take even more!  We all (up here on the C-suite floor) win!  Yeah!

Come on man, we're working ourselves literally to death by the time we should be retiring comfortably or, worse still, being put out to pasture long before we've been able to pay off the mortgage and get the kids through Liberal Arts degrees.  Mandate 6 week paid vacation time for 15+ years of service.  We could work it out.

I have never worked myself to death, and do not know anyone who has. Retiring comfortably takes planning and discopline, it is not entirely the fault of your employer if you are not able to do so. The same could be said for paying off your mortgage or sending your kids to college.

So you want employers, many of which are NOT ‘corporate America’’ to foot the bill for a 6 week paid vacation, COL increases, matching your 401k contribution, installing gender neutral toilets, ‘onboarding’ new employees, and on and on it goes.

Many people today are happy just to have a job!

If you feel that your present job is not satisfying...quit and get another. Or better yet, start your own company so that YOU can deal with the ‘you’ve got to take care of me’ mentality, COL increases and paying your employees for 6 weeks of vacation!

[BradleyPNW + 282]

8 hours ago, Gregory Purcell said:

 I don't see how Russia backed down,  they got what they asked for, the price WTI is not going back over $30 any time soon, Oil is in a price range which works for Russia, but not for KSA or most shale producers.   Also the Kremlin doesn't expect the Trump administration to live up to the deal.    The Kremlin has called first Obama then latter Trump “недоговороспособны”.  What that word means is literally “not-agreement-capable” or unable to make and then abide by an agreement.  While polite, this expression is also extremely strong as it implies not so much a deliberate deception as the lack of the very ability to make a deal and abide by it. 

KSA wanted production cuts in February. Russia refused. Oil price war started. Russia bragged about how resilient they were. KSA started discounting prices. One month later Putin was working the lines like a call center employee to come to an agreement and Russian energy minister Alexander Novak, not Igor Sechin, was leading the charge and receiving accolades from Russian media. In turn, Novak praised Putin. Sechin is PNGd. 
 

Quote

“(Russia’s) President (Vladimir) Putin had as many calls with (U.S.) President (Donald) Trump last week as he had for the whole of last year,” Kirill Dmitriev, head of Russia’s sovereign wealth fund RDIF, told CNBC on Monday.

If Russia had been fine and KSA had been hurting there would have been zero reason to agree to terms. To the contrary, Russia's incentive is to hurt KSA and help IRI. Putin went from "we will bury you" to "hey guys, I got beer and women wanna come over." Russian representatives are talking about how great this deal is for American shale, as if Russia cares about the health of American shale, lol. There aren't any Russian jokes about how KSA buckled. Putin isn't dancing on the grave of his enemy like he always does if he thinks he won. Russia was in serious pain and needed this deal to happen more than anyone else. 

Edited April 14, 2020 by BradleyPNW

[Dan Warnick + 6,100]

4 hours ago, Douglas Buckland said:

Many people today are happy just to have a job!

And yet, that ^ line means you get my point just fine.

[Douglas Buckland + 6,308]

1 hour ago, Dan Warnick said:

And yet, that ^ line means you get my point just fine.

No, I do not.

Why should people get 6 weeks paid vacation a year, why not 8?

Why shouldn’t we pay burger flippers $15/hr so they can afford a mortgage?

Do you honestly believe that small businesses can afford to give everyone their ideal job? Will these people agree to work for you for x amount of years to earn that 6 week paid vacation or will they change jobs after the first paid vacation?

You are painting all businesses, corporate or small, with the same brush.

The work ethic is eroding and this mentality of ‘someone must take care of me’ attitude is a root cause. Do you really want government intervention in the workplace?

I have a question for those who would demand a 6 week paid vacation in an effort to have a reasonably quality of life. What would you say to an employer who agreed to give you 6 weeks off a year so that you could pursue your quality of life, but it would be unpaid for 4 of those weeks. You are still being paid for two weeks in which you are not working!

You do realize the the business owner will likely have to hire a temp, or place ‘your’ workload on someone else, while you are away.

 

Edited April 14, 2020 by Douglas Buckland
Hhh