Saudi/OPEC "Cuts" fake per Aramco filings . . . all of 2018 and 2019 avg 10 million bbls/day

[Jabbar + 465]

I . . . LOWER PRICES ONLY MONTHS AWAY when Investors realize Saudis never cut and NonOpec supply increases 2.26 million bbls/day in 2020. 

*  Saudis produced 10 million barrels day 2018. When price crashed Oct 2018 they jumped production to 10.6 .  Used inflated number to assign themselves inflated quota. (Volume data from Aramco Financial Statements). Not one Investment Bank or Consulting firm analyst called them out on this.

*  OPEC stated goal was to reduce production to 5 year avg.  Then in 2019 voted to change the specific 5 years used to make easier to reach. Convienent. Not one Investment Bank or Consulting firm analyst called them out on this.

*  Saudi 2019 production thru first 9 months of 10 million barrels day (Volume per Aramco Financials released Nov 4th) . This when Saudi Arabia said they were "sacaficing" by reducing production below quota to 9.8 million barrels day for 2019. Not one Investment Bank or Consulting firm analyst called them out on this.

Saudis told the world beginning of 2019 thru to May that OPEC compliance and their "sacrifice" to go beyond their duty to produce 9.8 million/day (which was false) that oil was in "tight supply" thus running oil prices up.  Not until investors started believing Oil Insights satellite survey that proved the "tight supply"  to be a lie. 

Not one Investment Bank or Consulting firm called them out on this. In fact they willfully supported the lie without doing any fundamental research.

* December 2019 OPEC Meeting: None of OPEC members comply. That includes Saudi Arabia if you don't buy into their fake inflated production numbers just before they allocated quotas back in 2018. Saudis produced avg 10 million barrels all of 2018 and all of know 2019 up thru September 2019.  NO REAL CUTS, BUT A SAUDI MIRAGE. Not one Investment Bank or Consulting firm analyst called them out on this.

Only OPEC cuts are Trump's sanctions on Iran and Venezuela. 

* Nigeria , Iraq and Russia were the largest noncomplying OPEC+ .  OPEC is not going cut and allow Brazil, Norway, U.S. , Guyanan , Western Africa nations, Columbia and Argentina to compete with their cartels attempted price fixing.  

Here is THEIR DILEMMA .  .  How do we do that ? 

Russia came up with a brilliant plan. They posit that if we want to be in compliance and don't want to cut production we change the allocated production cuts without changing the production cuts ! Huh ?

Simple . . . you remove codensate from production.  (1)  Every barrel of condensate oil is now not considered as oil production. (2) Condensate has always been considered oil by the industry.  Example: if you mix 1 million barrels of HEAVEY OIL  with 1 Million barrels of CONDENSATE to = 2 Million barrels of blended oil under Russia's new definition it does not count as oil production. (3) Condensate has always been considered oil with a high API.  The actual API of condensate is disputed as anywhere between 40 to 70. (4)  Even if OPEC, Russia and Saudi Arabia now want to remove condensate as from oil production . . . it should be imperative that they remove condensate from the base when calculating the production quotas in 2018.  It only makes sense. OPEC+ production quotas SHOULD BE EVEN LOWER.

All OPEC+ NOW ARE IN COMPLIANCE .  AMAZING !

Not one Investment Bank or Consulting firm analyst called them out on this.

* The Saudis now say they will "sacrifice" and bear the brunt of last week's production cuts moving their quota down to 9.7 million/day. (a) First Saudis promised they "sacrificed" from January 2019 thru September 2019 to 9.8 million/day. Aramco's own financial statements show it was 10 million. (b) Second, of course applying the "condensate now doesnt count" scam they are already in new compliance with 9.7 million quota.

Expect the Saudi minions (Investment Banks and Consulting firms that want in on $ millions of fees) to proclaim the Saudi cuts will lead to tight supplies and thus higher oil prices in 2020.  In fact today, the first business day after last Friday's "Surprise" deeper cut announcement Goldman Sachs has put out a report stating pretty much the same claim. 

Simon Watkins wrote an article (below) aptly describing the true nature of KSA. 

Simon Watkins' Oil Price article

https://oilprice.com/Energy/Energy-General/Forget-The-Hype-Aramco-Shares-May-be-Valued-At-Zero-Next-Year.html 

NO "REAL" CUTS BUT FAKE CUTS  *  TOO MUCH OIL

Edited December 10, 2019 by Jabbar

[Tom Kirkman + 8,860]

1 hour ago, Jabbar said:

Russia came up with a brilliant plan. They posit 

 

Er, continue please ...

[Bob D + 562]

Love your posts Jabbar.

It is my opinion that if/when the Aramco IPO happens, the Saudis will be hard pressed to allow, nonetheless contribute to, the decline of oil prices.  It makes no sense to sell a 5% stake to establish a valuation, then harm the 95% stake with production ramps.  Aramco going public will forever alter OPEC's remaining control over member country's production #'s.  Not good for a cartel to lose the power of price/production manipulation.  We'll see.

 

\Added after reading of Aramco's IPO

1.5% of stock sold.  Doesn't seem smart to contribute to the demise of oil prices with $1+ Trillion of valuation still in your pocket.

 

Edited December 9, 2019 by Bob D