OPEC Cancels Press Conference

Where we are now

  • Monitoring committee recommended a production cut
  • OPEC agreed a cut will be forthcoming
  • Russia went back home to check in with Big Daddy to see if it could play too
  • Production cut quantity not specified
  • Exempt members not named (Libya, Nigeria, Iran all asking for one)
  • Meeting ended for the day, to resume tomorrow
  • Russia expected back at the table tomorrow
  • Oil prices still down as disappointed traders still skeptical
  • Press conference that was supposed to take place after the meeting has been canceled, suggesting that whatever has been decided thus far (or not decided) is disappointing

 

Let's play a game!

Raise your hand if you think Libya, Nigeria, and Iran will get an official exemption from the cuts?

Raise your other hand if you think Russia will agree to a cut of more than 250,000 bpd

Raise your little toe if you think Saudi Arabia and UAE will be saddled with the most significant cuts

 

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3 minutes ago, Rodent said:

Where we are now

  • Monitoring committee recommended a production cut
  • OPEC agreed a cut will be forthcoming
  • Russia went back home to check in with Big Daddy to see if it could play too
  • Production cut quantity not specified
  • Exempt members not named (Libya, Nigeria, Iran all asking for one)
  • Meeting ended for the day, to resume tomorrow
  • Russia expected back at the table tomorrow
  • Oil prices still down as disappointed traders still skeptical
  • Press conference that was supposed to take place after the meeting has been canceled, suggesting that whatever has been decided thus far (or not decided) is disappointing

 

Let's play a game!

Raise your hand if you think Libya, Nigeria, and Iran will get an official exemption from the cuts?

Raise your other hand if you think Russia will agree to a cut of more than 250,000 bpd

Raise your little toe if you think Saudi Arabia and UAE will be saddled with the most significant cuts

 

I'm a toe-in.  It's as it should be.

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oh, and "Saudi Arabian Energy Minister Khalid Al-Falih says he is "not confident of reaching agreement tomorrow," adding that the "main sticking point is getting agreement from all producers.""

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Sounds like Russia doesn't want to cut much or any at all.  Along with possibly angering President Trump that has had KSA back since the killing of the "journalist".  They can keep cutting and the US will keep taking market cap away as production increases here over time.  I don't think Russia wants to give up $$ on the table.

 

 

 

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Trump made it clear that he wants the oil prices down. The other leaders that gave MBS a pass on the recent events may be less explicit but they want the same thing. It wouldn't be wise to upset them.

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34 minutes ago, Rodent said:

Where we are now

  • Monitoring committee recommended a production cut
  • OPEC agreed a cut will be forthcoming
  • Russia went back home to check in with Big Daddy to see if it could play too
  • Production cut quantity not specified
  • Exempt members not named (Libya, Nigeria, Iran all asking for one)
  • Meeting ended for the day, to resume tomorrow
  • Russia expected back at the table tomorrow
  • Oil prices still down as disappointed traders still skeptical
  • Press conference that was supposed to take place after the meeting has been canceled, suggesting that whatever has been decided thus far (or not decided) is disappointing

 

Let's play a game!

Raise your hand if you think Libya, Nigeria, and Iran will get an official exemption from the cuts?

Raise your other hand if you think Russia will agree to a cut of more than 250,000 bpd

Raise your little toe if you think Saudi Arabia and UAE will be saddled with the most significant cuts

 

I'm going to go against the grain and put my left elbow and a little toe in but I'm propping up my left elbow with the edge of my right hand.

First of all, I do see Nigeria making a small concession, perhaps 70,000- 100,000 bbls per day, but no more. 

Russia is just testing the waters, they're the new kids on this block and they're going to see what kind of power they wield with this holdout.  They'll find it to be not much...

I say they're in for perhaps 150,000 - 175,000 bbls per day.

Libya not budging, same with Iran.

Between Saudi Arabia and The UAE , I'm saying 200,000 between the two, and here's why....

Saudi Arabia is getting tired of making cuts only to have US drillers make up the difference with unreigned production. And I promise you they're getting tired of the mouthing our President has been doing, essentially thinking he controls oil( I voted for Trump, but let's get real..)

This shell game is close to coming to a screeching halt and Saudi Arabia is soon to demand reciprocation from US drillers. 

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Little toe up - Libya and Nigeria could be coerced into non-significant cuts - Iran keeps on dragging feet - Russia runs away with the trophy... as @J Owens early today said ''Putin is the modern master of Realpolitik''

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7 minutes ago, Justin Hicks said:

I'm going to go against the grain and put my left elbow and a little toe in but I'm propping up my left elbow with the edge of my right hand.

Note to self: Hicks is trouble.

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(edited)

@Justin Hicks is my man 🙂 , just with less hands in the air. Little toe definitely and possibly the other hand up. Russia is just playing their silly game, but they will probably come around.  Anyway, the conference cancellation doesn't hint anything good. 

Edited by AdrianC
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Why thank you😊

I'm not a trader or business executive by any stretch of the imagination, just an ol' country kid who spent 24 plus years making everyone else rich.

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17 minutes ago, Justin Hicks said:

This shell game is close to coming to a screeching halt and Saudi Arabia is soon to demand reciprocation from US drillers. 

The Kingdom has to some degree resented for decades that they were the supply buffer.

Their situation isn't like a typical commercial entity where cost of production has much to do with how much they sell.

The KSA is also quite proud of the role, a power which they more or less discovered by accident when King Faisal was angry at the USA for supporting Israel in the 1973 war and cut the USA, and I think, the Netherlands, off.

For a few decades the Kingdom could easily dial back a million bpd, and there overall budget was fine. The population was much smaller, and the amount of government largess, and spending on out of the Kingdom policy pursuits, was much less. Today they run an overall deficit. They can do that for years at this rate and be OK, but it's painful. They got a little to used to $90+ a barrel oil.

Ho ho ho with getting independent oil companies cooperating. NOCs are one thing, and it's probably lost on MBS the lack of direct control a western government leader has on such things. And even Putin needs the Russian oil oligarchs support. We might not all worship the God of Abraham, but everybody tithes in one way or another.

 

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I still do not understand why WTI oil price fluctuates based on what OPEC does? OPEC has no power over North American oil supply. We have plenty of our  oil own. 

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(edited)

12 hours ago, Bobby P said:

I still do not understand why WTI oil price fluctuates based on what OPEC does? OPEC has no power over North American oil supply. We have plenty of our  oil own. 

OPEC oil is a "competing good" for WTI.  A Buyer of competing goods can go to either of two troughs to go gorge himself.  He can feast of OPEC oil if that price is lower, and if that price goes higher, due to the Cartel, then the Buyer can go over to WTI oil.  But because the traders of WTI are also rank speculators that try to gorge the market and thus the Buyers, the traders will demand more for their WTI in tandem with the price rise of OPEC as dictated by the cartel. 

If the two oils were "Differentiated goods," and sufficiently differentiated that a Buyer could not readily shift from one to another  (i.e. if the API densities were so different that only one  oil type would work in the Buyer's refinery) then the Buyer would not be influenced by price swings; if he were a Buyer of OPEC oils due to the oil characteristics, he would be a locked-in buyer and the WTI trader could not sell him, would have to stick with other buyers, and the price of WTI would turn on their overall consumption. 

And now you know why it is West Texas Intermediate; it is not too heavy, not very light, it is "in the middle" or "in between," so it can be matched, and thus a competing good, with other oils also calculated to be "intermediate," even if that "in the middle" is produced by blending lights and heavies.   They can only be competing goods if they have similar characteristics. 

Edited by Jan van Eck
edited "one oil type" to "only one oil type" for clarity
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Trump can STFU with his tweets about lower prices, he is not paying attention to what that is doing to the patch with those near breakeven prices, and i think he was the better candidate, go solve immigration or somethin, after all he is a contributor to this mess with his sanctions are coming hard on iran everyone open the tapd wide open then dupe everyone so now we have a supply glut along with the reduction in demand.  hand raised, russia will cut maybe reluctantly more than 250k if need be.  SA will ensure a cut is made i do believe because with their economic aspirations they cannot accomplish those without higher prices. 

just a guy in the patch hopin someone makes a rational decision, as i doubt we will be cutting production unless prices dip to the point we all go home lol

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13 hours ago, Rodent said:

Where we are now

  • Monitoring committee recommended a production cut
  • OPEC agreed a cut will be forthcoming
  • Russia went back home to check in with Big Daddy to see if it could play too
  • Production cut quantity not specified
  • Exempt members not named (Libya, Nigeria, Iran all asking for one)
  • Meeting ended for the day, to resume tomorrow
  • Russia expected back at the table tomorrow
  • Oil prices still down as disappointed traders still skeptical
  • Press conference that was supposed to take place after the meeting has been canceled, suggesting that whatever has been decided thus far (or not decided) is disappointing

 

Let's play a game!

Raise your hand if you think Libya, Nigeria, and Iran will get an official exemption from the cuts?

Raise your other hand if you think Russia will agree to a cut of more than 250,000 bpd

Raise your little toe if you think Saudi Arabia and UAE will be saddled with the most significant cuts

 

Left toe or right one? I want to be sure I'm voting in the correct manner, you understand.

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26 minutes ago, Marina Schwarz said:

Left toe or right one? I want to be sure I'm voting in the correct manner, you understand.

 

download (4).jpeg

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Left it is but the little one, as Rodent said. Done and done! Do we get some sort of formal recognition if we guess right? These things are important.

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2 minutes ago, Marina Schwarz said:

Left it is but the little one, as Rodent said. Done and done! Do we get some sort of formal recognition if we guess right? These things are important.

You've stumped me.  I don't happen to have an image handy for voting with a little toe.  You win a banana grin : )

 

5c4dbd43cafa67eef717f0d56845098085eabe282d0122781dbf340ab45ab241.jpg

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16 hours ago, Rodent said:

Where we are now

  • Monitoring committee recommended a production cut
  • OPEC agreed a cut will be forthcoming
  • Russia went back home to check in with Big Daddy to see if it could play too
  • Production cut quantity not specified
  • Exempt members not named (Libya, Nigeria, Iran all asking for one)
  • Meeting ended for the day, to resume tomorrow
  • Russia expected back at the table tomorrow
  • Oil prices still down as disappointed traders still skeptical
  • Press conference that was supposed to take place after the meeting has been canceled, suggesting that whatever has been decided thus far (or not decided) is disappointing

 

Let's play a game!

Raise your hand if you think Libya, Nigeria, and Iran will get an official exemption from the cuts?

Raise your other hand if you think Russia will agree to a cut of more than 250,000 bpd

Raise your little toe if you think Saudi Arabia and UAE will be saddled with the most significant cuts

 

all i know is that som surprises gonna occur and shake the market very well 

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16 hours ago, Rodent said:

oh, and "Saudi Arabian Energy Minister Khalid Al-Falih says he is "not confident of reaching agreement tomorrow," adding that the "main sticking point is getting agreement from all producers.""

Your forgetting Trump is the cause of this why should they cut it back, to bolster the US agenda and appease DT so he can tweet on how he made a so so sweet deal , a really cool the sweetest deal ever. OPEC May well Flex enough muscle and cause havoc for US Shale. 

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8 hours ago, Jan van Eck said:

OPEC oil is a "competing good" for WTI.  A Buyer of competing goods can go to either of two troughs to go gorge himself.  He can feast of OPEC oil if that price is lower, and if that price goes higher, due to the Cartel, then the Buyer can go over to WTI oil.  But because the traders of WTI are also rank speculators that try to gorge the market and thus the Buyers, the traders will demand more for their WTI in tandem with the price rise of OPEC as dictated by the cartel. 

If the two oils were "Differentiated goods," and sufficiently differentiated that a Buyer could not readily shift from one to another  (i.e. if the API densities were so different that one of oil type would work in the Buyer's refinery) then the Buyer would not be influenced by price swings; if he were a Buyer of OPEC oils due to the oil characteristics, he would be a locked-in buyer and the WTI trader could not sell him, would have to stick with other buyers, and the price of WTI would turn on their overall consumption. 

And now you know why it is West Texas Intermediate; it is not too heavy, not very light, it is "in the middle" or "in between," so it can be matched, and thus a competing good, with other oils also calculated to be "intermediate," even if that "in the middle" is produced by blending lights and heavies.   They can only be competing goods if they have similar characteristics. 

Jan as im only a grommet please forgive anything I may say (disclaimer 🤣) the differences in WTI and Brent are based on the fractional distillation and the subsequent products obtained from either type, Brent is valued higher as it yields more profit as it produces a wider range on end user products. I agree with you 100% but many users of this platform such as Me are not traders. The comment regarding what does OPEC have to do with WTI shows this. In a perfect world we wouldn’t have cartels and it should be a free market, Trump and the US regional producers have made their bed and now need to lay in it. OPEC May well hard line US Shale as very slowly we are seeing the End of the US dominance in calling shots globally, IMO the US should have continued their colonization of world oil by extracting others reserves and should have left their strategic reserves for when entering the Mad Max Syndrome , this was the original plan, Angola and Exxon was this plan in Action.

I may have digressed a little 👊🏻

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(edited)

1 hour ago, James Regan said:

Jan as im only a grommet please forgive anything I may say (disclaimer 🤣) the differences in WTI and Brent are based on the fractional distillation and the subsequent products obtained from either type, Brent is valued higher as it yields more profit as it produces a wider range on end user products. I agree with you 100% but many users of this platform such as Me are not traders. The comment regarding what does OPEC have to do with WTI shows this. In a perfect world we wouldn’t have cartels and it should be a free market, Trump and the US regional producers have made their bed and now need to lay in it. OPEC May well hard line US Shale as very slowly we are seeing the End of the US dominance in calling shots globally, IMO the US should have continued their colonization of world oil by extracting others reserves and should have left their strategic reserves for when entering the Mad Max Syndrome , this was the original plan, Angola and Exxon was this plan in Action.

I may have digressed a little 👊🏻

Responding to James Regan's observations above, there is no serious dispute that the "absolute value" of Brent vs. WTI has a grounding in the ultimate yields by distillation of the two competing grades of crude.  But - big but -that was not the question being asked by the original poster above.  The question rather was "why" the price changes in one would influence the other and cause that price also to change in tandem. 

So the original questioner was focused on the "relative values" of Brent and WTI.   They tend to move in tandem as they are what economists call "competing goods."   Poster James is correct in observing that as Brent gets the refiner more gasoline, it has more value, and thus a higher price, than WTI.  But if WTI fell to say five bucks, you can be assured that Brent would drop all the way down to ten.  They are locked together as they remain competing goods.  Cheers.

[P.S.  I'm not a trader either, as Trading is basically gambling.  Way beyond what my nerves could handle.]

Edited by Jan van Eck
added P.S.
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I guess i am the minority on this subject.

I still don't think there will be a cut.

The smaller producers cannot afford it.

The larger producers would love to cut,  but know that the other members ,  or the US will just step in and take that market share.

Either way,  the price will still stay low.

None of them (other than the US) like oil being so low,  but they are stuck.

I still say they will do nothing,  and postpone doing anything until there is some event in the future that upsets the market.

So,  i am standing pat.

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