OPEC Builds Case For Oil Supply Cut

[rainman + 263]

In a monthly report, the Organization of the Petroleum Exporting Countries said world oil demand next year would rise by 1.29 million barrels per day, 70,000 bpd less than predicted last month and the fourth consecutive reduction in its forecast.OPEC built a case on Tuesday for cutting oil output when it meets next month, warning that a supply glut could emerge in 2019 as the world economy slows and rivals increase production more quickly than expected.Worried by a drop in oil prices and rising supplies, OPEC is talking again of reducing production just months after increasing it. Such a shift would anger U.S. President Donald Trump, who on Monday urged OPEC not to cut supply.Oil prices have dropped steeply from a four-year high above $86 a barrel in October, pressured by concern that global demand is weakening amid adequate supply, offsetting U.S. sanctions on Iran that have started to cut the OPEC country’s oil exports. “Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” OPEC said in the report.

[Pavel + 384]

Remember supply and demand? Try lowering the price of gasoline.

[ThunderBlade + 231]

They will cut by a 1 million and demand will be underestimated again...

[pinto + 293]

Oil market will be very interesting....2.5% cut leads to $75+ in 2019.

[damirUSBiH + 327]

Global demand is quite strong. Looking at physical markets, esp India and China imports. I think we will have oil in triple digits in 2019.

[50 shades of black + 254]

OPEC manipulates oil supply in an unfree and unfair market. It is time to pass NOPEC to put real pressure on the cartel, which does not serve consumer interests. IEA's Birol urges OPEC to 'behave' responsibly and maintain 'comfortable' oil market.

[Tomasz + 1,608]

They want a multiyear floor for Brent at 70 $.

I think oil in 70-80 $ corridor is optimal.

But maybe oil price should be a little higher if you dont want  to have a supply crunch in first part of next decade.

For the time being there is a very low level of investment outside shale in conventional oil and for now shale is something about 5-6 % of total oil output. It will grow fast but most important is situation in non-Opec outside US and even in OPEC countries with higher break-even price.

Personally I agree with forecast that there will a oil and LNG deficit in next decade= natural result of relatively low oil and LNG prices in second part of this decade which means long underinvestment. T

This is a boom and bust industry and now we see only another part of neverending story.

Edited November 13, 2018 by Tomasz

[NatGasDude + 94]

5 hours ago, 50 shades of black said:

OPEC manipulates oil supply in an unfree and unfair market. It is time to pass NOPEC to put real pressure on the cartel, which does not serve consumer interests. IEA's Birol urges OPEC to 'behave' responsibly and maintain 'comfortable' oil market.

~60% of fuel cost for the consumer in the EU is taxes. It's a way of actively discouraging driving, owning a vehicle, as well as pumping the funds into the government's coffers.

 

In 2016 when oil was low, the petrol tax was ramped up to over 70% the cost of petrol. It appears that mismanaged and abusive tax schemes from corrupt governments is harsher on consumers than OPEC's practices.

 

[SERWIN + 749]

I was just reading that they are talking about dropping 1.4mbpd off production to drive oil back up. I work in Houston, TX, so you can only imagine how we are feeling when oil drops like it has. I understand the last quarter is usually the slowest of the year, oil usage is typically down, the plant shutdowns usually have an impact as well. But you can well imagine how many of us working for the oilfield feel when we saw what happened in 2015. I worked in machining for 26 years and was never once laid off, but it happened to me twice that year. I almost didn't come back after that, and now this drop has me wondering....

[Majed AlAhmadi + 5]

Due to the lag time between oil market and oil projects, oil market has to be controlled .

Historically Rockefeller then Texas Railroad then The seven sisters and now OPEC.

If there was no OPEC then a similar one has to be created.   

[NatGasDude + 94]

On 11/14/2018 at 4:44 PM, SERWIN said:

I was just reading that they are talking about dropping 1.4mbpd off production to drive oil back up. I work in Houston, TX, so you can only imagine how we are feeling when oil drops like it has. I understand the last quarter is usually the slowest of the year, oil usage is typically down, the plant shutdowns usually have an impact as well. But you can well imagine how many of us working for the oilfield feel when we saw what happened in 2015. I worked in machining for 26 years and was never once laid off, but it happened to me twice that year. I almost didn't come back after that, and now this drop has me wondering....

This is what people don't pay attention to. Trump and others who are proponents of sub 50 oil are destroying people's careers, and uprooting economies that depend on oil profits.

 

STABILITY should be called for. WTI between 60-80, Brent between 70-90. Boom and bust cycles destroy families and economies, and the benefits of employing hundreds of thousands of people and generating billions in GDP outweighs saving a few dollars at the pump.

[Brent Hamrick + 31]

American Oil is what should be watched. With that being said the oil barons are banking on the fact that we are all too distracted from what they are doing, opening up Alaska for oil drilling. So if you want to see the growth turn your attention to American oil companies. Check out the http://www.blm.gov to see the land lease sales coming up in December in Alaska and the lower 48 (Texas/Nebraska/Kansas/Wyoming/Colorado/Montana/Utah etc. Check out the companies that are planning on transporting this “newly found oil”. By 2020 the USA will be the dominate exporter of crude and LNG to the world. OPEC is being locked up and unable to bring their product to market. Right now oil is tanking as designed, come mid 2019 all the contracts for oil leasing will be finalized and paying. Get in now for the shift. Buffet mentioned several months ago that this company is worth watching in one of his owned news paper companies, ETE = Energy Transfer Equity. KMI = Kinder Morgan Inc is the Texas based company that is poised to build the remainder of the Keystone pipeline in 2019. Look it up.

I’m working on a list see below:

There are 2 companies in Alaska Arctic Slope Regional Corporation and the Kaktovik Inupiat Corporation applied for land lease.

VST = Vistra Energy Corp  (Koch brothers hold this)
GDOT = Green Dot Corporation  (Stash stock trading apt)
FORM = FormFactor Inc  (Koch brothers hold this)
TRP = TC PIPELINES LP Common Stock  (Keystone Pipeline builders)
ETE = Energy Transfer Equity  (transport)
KMI = Kinder Morgan Inc  (pipeline TX)
LNG = Cheniere Energy, Inc (https://business.financialpost.com/news/first-of-many-40b-lng-canada-signals-revival-of-mega-projects )
PAA = Plains All American Pipeline, L.P. (oil transport)
CHK = Chesapeake Energy Corporation  (drilling)
TNP = TSAKOS ENERGY N/SH (oil shipping/transport – Greek company)
EQNR = Equinor ASA  (Norwegian oil processing company)
ICE = Intercontinental Exchange Inc  (commodity market owner)
NBL = Noble Energy, Inc  (drilling/refining)
XOM = Exxon Mobil Corporation 
COP = ConocoPhillips 
EOG= EOG Resources Inc 
APA = Apache Corporation 
SAEX = SAExploration 
KMI = Kinder Morgan Inc (pipelines)
SRE = Sempra Energy 
Eni SpA = Eni (Italian company in Alaska)
EGY = VAALCO Energy, Inc (processing/drilling)
MUR = Murphy Oil Corporation  (exploration company)
NFX = Newfield Exploration  (exploration and production)
SWN = Southwestern Energy Company  (exploration and production)
HAL = Halliburton Company 
ESG = FLEXSHARES TR/STOXX US ESG IMPACT  (part of Halliburton) (offices in Alaska/CA/CO/TX)
WFT = Weatherford International plc 
BHGE = Baker Hughes A GE Co 
QTCQX:AMAZ = Amazing oil 
TELL = Tellurian Inc (transporter of LNG)

Tesoro was bought by Marathon Petroleum on October 1, 2018. (ARCO own’s Tesoro) https://en.wikipedia.org/wiki/Andeavor Why would they buy a company

MRO = Marathon Oil Corporation 
VLO = Valero part of Parent of Marathon Oil Corporation

[NatGasDude + 94]

29 minutes ago, Brent Hamrick said:

American Oil is what should be watched. With that being said the oil barons are banking on the fact that we are all too distracted from what they are doing, opening up Alaska for oil drilling. So if you want to see the growth turn your attention to American oil companies. Check out the http://www.blm.gov to see the land lease sales coming up in December in Alaska and the lower 48 (Texas/Nebraska/Kansas/Wyoming/Colorado/Montana/Utah etc. Check out the companies that are planning on transporting this “newly found oil”. By 2020 the USA will be the dominate exporter of crude and LNG to the world. OPEC is being locked up and unable to bring their product to market. Right now oil is tanking as designed, come mid 2019 all the contracts for oil leasing will be finalized and paying. Get in now for the shift. Buffet mentioned several months ago that this company is worth watching in one of his owned news paper companies, ETE = Energy Transfer Equity. KMI = Kinder Morgan Inc is the Texas based company that is poised to build the remainder of the Keystone pipeline in 2019. Look it up.

I’m working on a list see below:

There are 2 companies in Alaska Arctic Slope Regional Corporation and the Kaktovik Inupiat Corporation applied for land lease.

VST = Vistra Energy Corp  (Koch brothers hold this)
GDOT = Green Dot Corporation  (Stash stock trading apt)
FORM = FormFactor Inc  (Koch brothers hold this)
TRP = TC PIPELINES LP Common Stock  (Keystone Pipeline builders)
ETE = Energy Transfer Equity  (transport)
KMI = Kinder Morgan Inc  (pipeline TX)
LNG = Cheniere Energy, Inc (https://business.financialpost.com/news/first-of-many-40b-lng-canada-signals-revival-of-mega-projects )
PAA = Plains All American Pipeline, L.P. (oil transport)
CHK = Chesapeake Energy Corporation  (drilling)
TNP = TSAKOS ENERGY N/SH (oil shipping/transport – Greek company)
EQNR = Equinor ASA  (Norwegian oil processing company)
ICE = Intercontinental Exchange Inc  (commodity market owner)
NBL = Noble Energy, Inc  (drilling/refining)
XOM = Exxon Mobil Corporation 
COP = ConocoPhillips 
EOG= EOG Resources Inc 
APA = Apache Corporation 
SAEX = SAExploration 
KMI = Kinder Morgan Inc (pipelines)
SRE = Sempra Energy 
Eni SpA = Eni (Italian company in Alaska)
EGY = VAALCO Energy, Inc (processing/drilling)
MUR = Murphy Oil Corporation  (exploration company)
NFX = Newfield Exploration  (exploration and production)
SWN = Southwestern Energy Company  (exploration and production)
HAL = Halliburton Company 
ESG = FLEXSHARES TR/STOXX US ESG IMPACT  (part of Halliburton) (offices in Alaska/CA/CO/TX)
WFT = Weatherford International plc 
BHGE = Baker Hughes A GE Co 
QTCQX:AMAZ = Amazing oil 
TELL = Tellurian Inc (transporter of LNG)

Tesoro was bought by Marathon Petroleum on October 1, 2018. (ARCO own’s Tesoro) https://en.wikipedia.org/wiki/Andeavor Why would they buy a company

MRO = Marathon Oil Corporation 
VLO = Valero part of Parent of Marathon Oil Corporation

American oil CONSUMPTION is so high that there is no way that USA will become dominant oil exporter in 1 year. It is impossible, we are a primary consumer, the highest consuming nation, almost double that of China (#2).. Would have to triple US oil production in order to become the largest exporter on the planet, because we are consuming it all.

There is too much domestic demand. Saudi Arabia, Russia and Iraq have the advantage that they produce more than they consume by a large margin, so they are basically directly putting oil tankers on the water, or crude in the pipelines to Europe and China.