IT IS FINISHED. OPEC Victorious

[Annamaples + 1]

Just so happy that OPEC has gone and done it. Thank you for this news from you. This is great, oil really needs to go up again. I hope Trump does not twist their arm!!!

 

[Justin Hicks + 162]

8 minutes ago, Brent Hamrick said:

REMEMBER OCTOBER 29TH.  

I posted this back on Oct 29th let me send a gentile reminder what I posted:

" I have a feeling that the wind blowing the sail of OPEC+ will suddenly fall flat. The ability for the nations of OPEC+ will find it very challenging in coming future to bring their products to market to sell. US companies will suddenly see new life blow their way to fill their sail moving US into a position of oil dominance again.  Saudi Energy Minister Khalid al-Falih is trying to broker a deal with Russia to side step OPEC current conditions. Seems a bit odd to me, why would you try to make an open ended partnership with a new player in the world stage of oil  unless he senses something. While on the other side of the stage a large portion of transport companies are gearing up to build the rest of the pipeline in US moving crude from the north to Texas. The picture of puzzle is starting to be visible from what I can see. " 

Watch. By mid 2019 Alaska will come out of no where with exporting US crude. December is the month that www.BLM.gov will be holding sales for land lease drill rights. Plus having Alaska drilling rights finalized by mid 2019 the pipelines will be flowing.

 

Don't want to say it, buuuuuuut                

 

I'm not sure about the Alaska part. Their government and current infrastructure is a wreck at best. I have a friend that lives in Anchorage( he missed the earthquake) he says it not what it's cracked up to be.

[Rodent + 1,424]

SAUDI'S PORTION OF THE CUT 500,000 BPD: Al-Falih

[Rodent + 1,424]

6 minutes ago, mthebold said:

If they leave prices low, they suffer.  If they cut production to raise prices, they lose market share.  Does this really count as a "victory"?

Yes, I think so.

Price rose today. Production won't even start to decrease for another month. It will take another couple of months to reach the promised low. Nothing changed today except prices rose. I'd call that an OPEC victory. 

[Jan van Eck + 7,558]

17 minutes ago, mthebold said:

My understanding is that new pipelines will resolve this issue in 2019.  There's also evidence that new refineries are being built even as old refineries adapt to light oil.  Would it be fair to say that, with affordable shale oil here to stay, the demand for it will increase?

But of course!   The supply creates its own consumption pattern. 

[Dan Warnick + 6,100]

59 minutes ago, Tim Turley said:

There was no doubt OPEC would cut, the question was just how much.  The 1.2 mbd cut is pretty healthy, should send WTI back to $60 in the near-term. 

Trumps wishes for sub-$50 contradict a strong US oil industry of which half of production is shale, which a majority needs $50+ to break-even.  The election is over, and the Khashaggi thing is dying down, so KSA has pretty much tuned out Trump.

I think you are right in that WTI will probably go back to $60-ish in the near term.  I also believe there will be a usual "over-achievement" of that target for a somewhat brief period of time before it settles back at $60-ish again.  (Ultimately, WTI will go to the $30s, but that is for a discussion later next year).

However, this perception of trump wishing for sub $50 oil, and yes Trump is on record repeatedly saying it, belies his true intentions.  Trump always drives for far more than he believes he can get in order that he may achieve his true goal; in this case oil in the $60s.  I believe Trump, rightly or wrongly, believes if he doesn't push for sub-$50s oil then we will see it climb into the $70s again and possibly higher.  He has also demonstrated his will to get to fight a hard fight and people now take him VERY seriously when he threatens, especially in cases such as this where his true power to affect oil prices is largely an impression, not a reality.

[William Edwards + 708]

For about a month now each day the trading community has put on longs early in the day, expecting this to be the day that the recovery begins. Each day they have sold at a lower price at the close of the day as no follow-through has occurred. In other words, the hoped-for "recovery" has not existed. 

Today seems to be a repeat of the pattern. Enthusiasm for the elusive "recovery" began with the OPEC announcement early, followed by the disappointing drop-off at the end of the NY trading day. Eventually this repeated disappointment will result in even the slow-witted performers catching on. At that point the enthusiasm at the start of the day will reverse and the mood will revert to the expectation of a lower, not higher, price. Lower and lower prices will be the result. I suspect that in a month or two $50/B will look like a wonderful price, not a floor.

[PaulG + 21]

49 minutes ago, mthebold said:

 

 

My understanding is that new pipelines will resolve this issue in 2019.  There's also evidence that new refineries are being built even as old refineries adapt to light oil.  Would it be fair to say that, with affordable shale oil here to stay, the demand for it will increase?

Did it every get built, that article is from 2016, and 50,000 barrels a day is really small

[William Edwards + 708]

I tuned in "live" to the OPEC press conference this morning and was able to hear the words and read the body language of the two main leaders, the Saudi Oil Minister and the Russian Oil Minister. "Self-satisfied and confident" are the words that I use to describe their demeanor. Quite consistent with "OPEC Victorious". My view? Simplistic self-congratulation of men who genuinely want to perform well, but both seem to lack the basic understanding that it is impossible to set a desirable price by insuring that demand and supply are nicely matched. Therefore do not be surprised when they are disappointed with the market performance between now and the next OPEC meeting. And may I request that you re-visit your assessment in three months, Rodent, and report to us.

[William Edwards + 708]

1 hour ago, Annamaples said:

Just so happy that OPEC has gone and done it. Thank you for this news from you. This is great, oil really needs to go up again. I hope Trump does not twist their arm!!!

 

Fear not! Trump has no influence in this arena. Futures traders are in control. And they care not whether prices are high, or low. Just that they move. But down will work as fine as up, thank you!

[Jan van Eck + 7,558]

1 hour ago, Dan Warnick said:

  (Ultimately, WTI will go to the $30s, but that is for a discussion later next year).

 

We can have that discussion when oil slides all the way to $27.   Which is what I suspect is going to happen, eventually. Probably once the Winter is over, as winter oil heating demand tends to prop up consumption. 

[Jan van Eck + 7,558]

1 hour ago, William Edwards said:

For about a month now each day the trading community has put on longs early in the day, expecting this to be the day that the recovery begins. Each day they have sold at a lower price at the close of the day as no follow-through has occurred. In other words, the hoped-for "recovery" has not existed. 

Today seems to be a repeat of the pattern. Enthusiasm for the elusive "recovery" began with the OPEC announcement early, followed by the disappointing drop-off at the end of the NY trading day. Eventually this repeated disappointment will result in even the slow-witted performers catching on. At that point the enthusiasm at the start of the day will reverse and the mood will revert to the expectation of a lower, not higher, price. Lower and lower prices will be the result. I suspect that in a month or two $50/B will look like a wonderful price, not a floor.

If you want to see just how slow-witted day traders (and "shorts") can be, take a look at their stellar performance shorting Tesla.  All those guys went toe-to-toe with Elon Musk, and how many billions have they dropped?   They never learn. 

Edited December 7, 2018 by Jan van Eck

[William Edwards + 708]

7 minutes ago, Jan van Eck said:

If you want to see just how slow-witted day trader s(and "shorts") can be, take a look at their stellar performance shorting Tesla.  All those guys went toe-to-toe with Elon Musk, and how many billions have they dropped?   They never learn. 

You don't even have to stray out of the oil patch, Jan, to evaluate the wisdom of the trading community. The charts tell me that ALL of the longs put on this year are now in the red.

Edited December 7, 2018 by William Edwards

[Rashed ALSAYED + 11]

7 hours ago, Rodent said:

OPEC has gone and done it. Deal reached, 1.2 million bpd cut, Russia included

Iran, Libya, Venezuela given special dispensation.

 

hope we all did well this week and gained lots of pips

[Karl V + 33]

Trump is jealous , that Obama had $100 and $30 oil prices , and Zero interest rates .

The interests rates in the USA are rising , and Trump complained a little about it ,

but he seems to desire Obama's $30 oil price much more .

 

[Rodent + 1,424]

12 minutes ago, mthebold said:

Is this out of proportion?  Also, would this have anything to do with SA recently producing more than their share?

Yes. I believe they said everybody would get a 3% cut assuming the ones with exemptions (2% without those). Saudi produced like... 10.1 million bpd in October, so the 500,000 bpd seems artificially high unless my math is incorrect, and it might be. Friday evening already.... the day has passed me by.

[shadowkin + 584]

6 hours ago, Justin Hicks said:

I would have to disagree, Trump merely barks at something he has no idea of( and remember, I voted for the guy so I can say this😊)

At the moment oil is traded in USD, even tho the US has not been a major importer of OPEC oil for quite some time.

In the past few years China has increasingly called for oil to be purchased in yuan, and they are one of the larger importers of OPEC crude.

I'm not sure if Trump foolishly believes his 160 billion dollar deal in arms to the Kingdom allows him to say what OPEC does, but he needs to realize if the yuan takes the place of the dollar as far as oil trading, there goes 600- 800 billion in oil trade for the US. Too many people believe the arms deal holds more clout than it actually does.

As I've said previously, without concession from the US, the Saudi's will soon tire of this shell game.

What gives the US leverage over Saudi, thus OPEC, is not one particular arms deal. It is that no matter how many billions of dollars worth of weapons Saudi buys from the US they haven't a clue how to effectively fight a conventional war with sophisticated weapons. It is as Trump said they wouldn't last 2 weeks without the US. The timing may be an exaggeration but the outcome is not. The weak in the ME are slaughtered.

That's why Saudi 'invited' in 500,000+ US troops for Gulf War I. As Arabs go Saudis are particularly averse to anything that smacks of work. Why do you think they import so many foreigners to do it for them. Why do you think they were making noise about a muslim NATO which they expected Pak to do all the heavy lifting i.e. the fighting and dying?

Trump isn't the first US president to threaten Saudi and he won't be the last. He's just the latest to verbalize what is implicitly understood by all.

 

[Enthalpic + 1,496]

6 hours ago, Jan van Eck said:

 

The Saudis have long ago tired of it, but find that as a technical matter, US military goods are better than other peoples' military goods.  And because the KSA feels threatened by its neighbors, the KSA wants the best stuff available. 

Saudis recently bought 15 billion worth of arms from Canada

[cbrasher1 + 272]

I was close, I predicted this amount on another thread yesterday....I'm happy 😁😁

 

today is the day...OPEC defies Trump's call for continued wide open taps and does the smart thing and agree to production cuts.  I am thinking 1.1 mill bpd maybe?  After all I believe that is what they do for him helping create this oversupply by granting concessions to countries when sanctions on Iran were re-instated.  Sitting out on location hoping for a positive outcome 🙂 I do not foresee OPEC attempting to flood the market again as I am sure they recall the last outcome of that bet, it hurt us as well as themselves and they need they higher price to balance their budget and fund their projects.

Edited yesterday at 03:29 AM by cbrasher1

[Rodent + 1,424]

5 hours ago, William Edwards said:

I tuned in "live" to the OPEC press conference this morning and was able to hear the words and read the body language of the two main leaders, the Saudi Oil Minister and the Russian Oil Minister. "Self-satisfied and confident" are the words that I use to describe their demeanor. Quite consistent with "OPEC Victorious". My view? Simplistic self-congratulation of men who genuinely want to perform well, but both seem to lack the basic understanding that it is impossible to set a desirable price by insuring that demand and supply are nicely matched. Therefore do not be surprised when they are disappointed with the market performance between now and the next OPEC meeting. And may I request that you re-visit your assessment in three months, Rodent, and report to us.

indeed I shall. I mean, I'm sure I'll forget if left unattended, so please do remind.

it is your impression that prices won't hold even if they curb production? (all other things being equal of course) 

I missed the live stream, buried in other writing endeavors, but I would have LOVED to watch this live! interesting how body language, tone, and facial expressions add another layer of understanding. they say communication is 93 percent nonverbal!

[John Foote + 1,135]

Curious, how many think Saudi could have maintained their recent record run rates? 

[Cowpoke + 70]

2 hours ago, shadowkin said:

" they haven't a clue how to effectively fight a conventional war with sophisticated weapons. "

 As Arabs go Saudis are particularly averse to anything that smacks of work. Why do you think they import so many foreigners to do it for them. "

 

Which is why they would allow  the Israeli air force to use their  airspace to target Iran.   

Edited December 8, 2018 by Cowpoke

[ronwagn + 6,290]

11 hours ago, Justin Hicks said:

I would have to disagree, Trump merely barks at something he has no idea of( and remember, I voted for the guy so I can say this😊)

At the moment oil is traded in USD, even tho the US has not been a major importer of OPEC oil for quite some time.

In the past few years China has increasingly called for oil to be purchased in yuan, and they are one of the larger importers of OPEC crude.

I'm not sure if Trump foolishly believes his 160 billion dollar deal in arms to the Kingdom allows him to say what OPEC does, but he needs to realize if the yuan takes the place of the dollar as far as oil trading, there goes 600- 800 billion in oil trade for the US. Too many people believe the arms deal holds more clout than it actually does.

As I've said previously, without concession from the US, the Saudi's will soon tire of this shell game.

What concessions are you referring to? 

[William Edwards + 708]

3 hours ago, Rodent said:

indeed I shall. I mean, I'm sure I'll forget if left unattended, so please do remind.

 it is your impression that prices won't hold even if they curb production? (all other things being equal of course) 

I missed the live stream, buried in other writing endeavors, but I would have LOVED to watch this live! interesting how body language, tone, and facial expressions add another layer of understanding. they say communication is 93 percent nonverbal!

You asked "it is your impression that prices won't hold even if they curb production?" Absolutely! Prices are NOT determined by supply/demand balances. In fact, if you think through it, supply always matches demand, with slight swings allowed by inventory accumulation/depletion.

And I fully agree that non-verbal communication is quite important. That is one of the reasons that I have attempted to personally observe the OPEC leaders for decades., both in person and on video.

[David Maloney + 2]

10 hours ago, William Edwards said:

I tuned in "live" to the OPEC press conference this morning and was able to hear the words and read the body language of the two main leaders, the Saudi Oil Minister and the Russian Oil Minister. "Self-satisfied and confident" are the words that I use to describe their demeanor. Quite consistent with "OPEC Victorious". My view? Simplistic self-congratulation of men who genuinely want to perform well, but both seem to lack the basic understanding that it is impossible to set a desirable price by insuring that demand and supply are nicely matched. Therefore do not be surprised when they are disappointed with the market performance between now and the next OPEC meeting.

 

5 hours ago, Rodent said:

I missed the live stream, buried in other writing endeavors, but I would have LOVED to watch this live! interesting how body language, tone, and facial expressions add another layer of understanding. they say communication is 93 percent nonverbal!

Video - OPEC and non-OPEC ministerial meeting in Vienna - Press Conference 12-7-18

1 Hour 40 Minutes - The conference starts at the 4 minute mark (just left-click and hold on the time slider, and slide over to 4 minutes).

https://www.youtube.com/watch?v=fYyrjhHBBUM

Edited December 8, 2018 by David Maloney