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OPEC Decision Is "Major Strike Against The American Market", Russian Tycoon Says
As we warned yesterday, the last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. OPEC's decision not to cut production, and Nigeria's comments on the need for burden-sharing among non-OPEC members, ensures a crash in the US shale industry according to Leonid Fedun (Russia's Lukoil board member). The Russian finance minister's comments that oil at $80 in coming years is moderately optimistic and as Fedun ominously warns, this is a "major strike against the American market." Isolated, much?
OPEC policy on crude production will ensure a crash in the U.S. shale industry, a Russian oil tycoon said.
The Organization of Petroleum Exporting Countries kept output targets unchanged at a meeting in Vienna today even after this year’s slump in the oil price caused by surging supply from U.S shale fields.
American producers risk becoming victims of their own success. At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable for some explorers, Leonid Fedun, vice president and board member at OAO Lukoil, said in an interview in London.
“In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again,” said Fedun, who’s made a fortune of more than $4 billion in the oil business, according to data compiled by Bloomberg. “The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish.”
...
In Russia, where Lukoil is the second-largest producer behind state-run OAO Rosneft, the industry is much less exposed to oil’s slump, Fedun said. Companies are protected by lower costs and the slide in the ruble that lessens the impact of falling prices in local currency terms, he said.
Even so, output in Russia, the biggest producer after Saudi Arabia in 2013, is likely to fall slightly next year as lower prices force producers to rein in investment, Fedun said.
“The major strike is against the American market,” Fedun said.
* * *
“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke,” said
Daniel Dicker, president of MercBloc Wealth Management Solutions with
25 years’ experience trading crude on the New York Mercantile Exchange. “The shale revolution doesn’t work at $80, period.”
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Burn baby burn.
I forgot who said it on here a few years ago -- but it went something like this;
First you will have stagnation, then deflation, then inflation, then hyper-inflation.
I have thought about his comments (whomever he was) often lately.
I once read here "Beauty is in the eye of the beer holder"
that was also so true...
it's for that kind of wisdom I return here every day
and as we're getting all nostalgic and stuff... WHAT EVER HAPPENED TO ROBO TRADER?
What's the count on loans from TBTFs.....prepare for outrage 3.0
CONFIRMED- Saudi Arabia knifes AmeriKa in the back- AGAIN!
With friends like the treacherous Zionist snakes that infest the House of Saud... who needs enemies?
Are you a pilgrim descendant? A son of the pioneers? Then you're surrounded by enemies on all sides. They don't hate your freedom. They hate the fruits of your liberty, and they want it all for themselves.
Saudi Arabia- Tyrannical theocracy
Israel- Tyrannical theocracy
Syria- Tyrannical secular autocracy
Iran- Democracy
Russia- Democracy
United States- Totalitarian secular tyranny
I call it like I see it.
#9
You really have to watch out for those wahabbi zionists. They're even worse than those shinto zionists or those hindu zionists and that takes some doing.
TM correct me if i'm wrong but it appears there is a common denominator in that win treble.
you put salt in all your dishes?
I mean zionist is like salt to you.
Try violinist, its pepper!
DA COMRADE!
Is death to Amerikanski """market""" .
Is long due over..
Is tell Headbanger should buy moar Brown Bear 7.62x39 for nice 1952 Tula SKS
But is to say Tula ammo is from butt of dog.
Why would you want that non-reloadable Russian crap when Barack Obama will sell you an M-1 Garand and all the 30.06 ammo, including AP, incendiary, and SAP you will ever need. Bayonets, accessories and parts, too. He'll even deliver it right to your door. No gun dealer BS at all.
http://thecmp.org/cmp_sales/rifle_sales/m1-garand/
Ka-POOM theory...
No. 9 - Congratulations for demonstrating that the Prussian influenced public schools have fully succeeded.
Prussian influenced?
I feel bad for Prussia. Occuped right now by the Poles and the Russians.
deleted due to historical error
"Sorry E-mini momo's, gotta by WTI futures now, see y'all later " .. Yellen
"
OPEC Decision Is "Major Strike Against The American Market""
As if EROEI had nothing to do with it.
Debt addicts. They never change.
Sun Tzu and Count Dracula forced Hank "tanks in the streets" Paulson bailout the Chinese and Russian CBs at the expense of American debt serfs. Yeah they lost on a few bps with the migration from agency to sovereign and shortening their duration exposure, but they could (and in some cases did) make up for it with rehypothecation.
So what's their playbook this time? ...re-acquiring domestic strategic energy assets at bargain that were sold to the West at similar bargain prices by that drunkard Yeltsin and his kleptocrat buddies a couple decades ago?
It didn't. Even extracting oil on Titan is worthwhile when the price is right.
You are funning about the moon Titan, No? You just can't be serious? Please tell me that you haven't pinned your hopes on that somehow not being the 1 from 100 EROEI (not even a return of capital) kind of situation. The engineers lurking here will eat you alive if you really mean that. They will be all over you like the walking dead on fresh meat bags. Just observing.
Burn this motherfucker down! Burn this bitch down! Burn this bitch down!
This is an economic war being carried out by the Nobel Prize Winner against Russia knowing that $10 oil price engendered by the Saudis in 1986 caused the collapse of the Soviet Union.
Putin will not sit idly and watch his economy destroyed. There will be consequences - economic wars often lead to military conflicts. And Ukraine has been heating up.
I am for Planetary suicide. Let's go nuclear war. Bring it on. Yeah. Who cares about the loss of life? If the Oligarchs cannot win then nobody shall.
You see the real crux of the problem is we have the masses of idiots being led by the pyschopaths.
And the people have hope? Now that is the fucking humor in this.
I will be dying laughing.
living n crying, laughin n dying; something that nihilism adores and progressivism detests.
When a religious man loses his religion, a defrocked priest finds his soul totally empty.
Fly away empty shell maybe to Hell !
Come back hope there is no Pope!
You choose!
Pu-239 is putin's gamechanger.
No. I disagree. It is the Game Ender.
Throw the damned Chess Board and scatter the pieces. Yeah Putin. Throw a fit like a Three Year Old.
"I will be dying laughing."
I'll die of fucking boredom if they don't get started soon. All fart and no follow-through with these pussies.
So you wish to die in a Nuclear War?
You are insane.
The USA has already NUKED Hiroshima and Nagasaki.
We turned the Kuwiati Desert into an ocean of Nuclear Glass with Depleted Uranium.
And you think that they haven't the balls.
It is like that Cop in "V is for Vendetta" said...
"Then somebody will do something stupid."
If you believe that they will not then you are fooling yourself.
You can bet it will be some religious wingnut that declared he did it with some god's approval.
I'm not insane, I just learned to stop worrying and love the bomb. ;)
To the CHICKENSHIT junker...What a fucking coward.
You tell me HOW a God Damned Nuclear War is somehow "winnable".
If Putin plays the Pu-239 card..That is the END of the fucking WORLD.
So go fuck yourself. Enjoy your God Damned annhilation.
Hyperbole much?
It's fight club moron, pull up your big girl panties already.
It has always been my personal policy to junk anybody who comments on red arrows. Ah, dammit ... I just had to junk myself for making this comment.
Cheer up Tom, you'll always be our favourite unstable element.
It won't be Putin playing the PU-239 card. It will more likely be Israel, like they did in Bali.
If there's any country that needs to have its nuclear capability confiscated by the international community and a regime change installed, it's Israel.
Cap EX. GDP to the moon!
Putin to Obama-
"You left your queen wide open while attacking my bishop. Now prepare to die, you worthless commie faggot."
Grandmaster Putin's Golden Trap
18 November
Excerpts from 3052-word post:
… In chess the situation in which Putin has put the West, led by the US, is called "time trouble"…
After realizing its failure in Ukraine, the West, led by the US, set out to destroy Russian economy by lowering oil prices…
Last time, under President Reagan, such actions of the West's lowering of oil prices led to 'success' and the collapse of USSR. But history does not repeat itself all the time…
No matter how strange it may seem, but right now, Putin is selling Russian oil and gas only for physical gold...
In this brilliantly played by Putin economic combination the physical gold is rapidly flowing to Russia, China, Brazil, Kazakhstan and India, the BRICS countries, from the reserves of the West. At the current rate of reduction of reserves of physical gold, the West simply does not have the time to do anything against Russia until the collapse of the entire Western petrodollar world.
…Putin sells Russian energy resources in exchange for…US dollars, artificially propped by the efforts of the West. With which he immediately buys gold, artificially devalued against the U.S. dollar by the efforts of the West itself!...
This time WE are the "soviets"!!
The Russians are WITH the Saudis this time, along with the rest of the world minus Europe!
They will kill the petrodollar, gain world market share in energy, push commodity prices down (so China can hoard bigger) and collapse the US economy under its own weight in debt!!
Meanwhile in America, Dancing with the Stars and Voice and the game are on, don't interrupt my fantasy world, with the real one!! America is exceptional and we will always have it all, right??
Is Saudi Arabia considering a bigger brother for protection these days? US not looking as 'big' - or reliably protective - as it once did.
Bigger brother? Not hardly. With the sunk costs of all those bases and weapon systems over there, not going to happen. Plus there is the implicit co-dependency that will never be frack-tured.
There biggest customer is China on the oil scene and most of the military they have bought over the last few years is Chinese.
QE fucked the petrodollar, and once they formally engage on QE again then it will destroy it.
The canary is the coalmine will be a declaration by the GCC states to unpeg from the dollar with the creation of the unified dinar or something like that. This is what i am looking out for.
Saudis don't fart unless they check in with the US first
16 March 2006.
A day that should live in infamy, and which fundamentally altered the path KSA chose to follow.
Achilles heel ?
yes... but the American people get to enjoy their less toxic drinking water a bit longer so it's still some kind of win-win...
The heat is on!
Well the US Government will just print and subsidize the Shale Oil Industry.
Can Putin do the same for the Russian Economy, 40% of that of which is dependent upon Oil Revenues?
Laughing out loud.
$60 Oil here we come. Yeah!!! Bankrupt them all...all of the Oligarchs. I cannot care less what Nationality.
Yeah. Bring that on.
We need a new Gas Tax added to finance that subsidization. That will kill further consumption and create a total glut. It may even backfire and bring OPEC down too.
Goodbye Saudi Oligarchs.
Bankrupt them all.
We'll see new gas taxes everywhere. They know that $4.00/gal. gas is our limit, and they know they can tax the lower prices like hell because no one pays attention.
Even if people do pay atterntion and voice opposition they will tax the shit out of it at the pump.
The Senate has already proposed a hike from 18 to 30 cents per gallon. More for diesel.
http://thehill.com/homenews/senate/209769-murphy-and-corker-propose-raising-164-billion-through-higher-gas-tax
This is a transfer of wealth from you to the Government, then to the Shale Industry, the ones which Uncle Sam chooses to save, right at the Gas Pump.
You will pay for that as you did with Solyndra. But it will cost you far more.
Damn I love free markets. I just wish that we actually had one...for a change.
Saudis are still making money at $4/bbl. The only bankruptcies here will be the marginals most of which are shale producers.
When oil prices go up, the oil producing parts of the US boom and the consuming parts are hurting. When oil prices go down, the reverse happens. For the Saudis they do better when oil prices go up and worse when it goes down. There's no real economy besides the petro sector. Sure, Saudi Arabia still makes money on a barrel of oil at ridiculously lower prices than anyone else but they have to carry their whole economy and their dysfunctional political system on that one product. You can't do that without massive profits.
I believe Russia is okay with this oil price decline, as they, too, want US production to go down. It won't be easy to ramp up US production next time because lenders will see they can be wiped out easily by OPEC. They didn't expect that this time.
All done with a wink and a nod from the Obama administration. They hate oil and desperately want to do damage to the U.S. oil industry.
All the while Saud shakes up the Oil producer environment, watch out for the emergence of a new Mamluk state in Egypt under SISI.
The new president is hell bent to use his Army, now firmly in secular control of the country, to launch a series of mega projects based on political stability and investment opportunities under military control.
Whereas Syrac blows up in instability Egypt emerges as a new power center of Arab world.
Russia's Putin has something to do with it via GAzprom.
Sisi may be a key player for the next decade in that region whatever the US and Israel do as overlords of its neighbours.
Big projects include re-creating a tourist industry now dormant, doubling the Suez Canal, and infrastructure and oil and gas projects. With a consumer population of 82 million Egypt wants to rival Turkey (74 million) as rival secular (more so than Erdogan) Sunni cultured state. The arab monarchies finance these projects. So Sisi has backing.
Dunno how many US shale jobs are now at risk, 250,000-500,000? It's perverse that these jobs were created in part by the opportunity fiat-conjuring provided (free debt, NRG price bubble). If there is an area that has a job multiplier effect, it's energy. Shale energy is transforming the US petrochemical business, and making LNG exports viable. Lower natty g prices also make agricultural fertilizer input costs more affordable, which slightly lessens the cost of vegetables and meat @ the grocery store. I have no love lost for the Saudis. I'd like to see more Americans earning a paycheck, and it would be nice not to have to support the GIGANTOR military that foments/supervises war in the Middle East, all in the name of 'US energy national interest'. Maybe some entrepreneur can find a way to bend the shale extraction cost curve down another $20 bucks a barrel. Looking forward, I dont expect every OPEC member is going to be able to take the pain of <$70 oil for more than 6 months, 12 tops. In the next 3 months, I'll buy 1000 gallons of diesel and 1000 gallons of gasoline. This price level wont last, and the market will clear higher.
The anti-Americanism on this site, while sometimes justified, really blinds people to endgames. Let's see - is $60 oil really bad for America? Do you think TPTB think low gas prices to assuage the masses, who then buy gadgets, that drives the stock market up, is a bad thing? What most seem to forget is that The U.S. Economy does better, much better, with low oil prices. Sure, it may drive some highly leveraged shale guys out of business (where the big oil companies will simply buy their stakes), but the Saudi Arabian and Russian economies are built on energy. Eventually low energy prices hurt them, not the US
No - its not bad for america.........however for extreme entrepots it means the end if production /consumption declines.
Have to agree with ya there. I dont really get this nonsense of low oil prices hurting the American economy. Sure, it will hurt ONE sector of the economy, but like you said, all that money that is saved on energy costs will open the door to either new industries or to more consumer spending. And like you said, the ones in danger are the countries solely dependant on exporting energy.
In a nutshell: BIG DEBT BUBBLE financed the shale oil expansion. A large chunk of the junk bond bubble is shale oil debt issuance.
But it will be "contained".
Instead of spending $ on domestic energy, they will ship those dollars to China for iCrap... Whithout a long term positive balance of trade and capital flows, it is a LOSING proposition, regardless of the short term crack high to the USSA debt addicts. When it's time to pump up the CapEx again, the banksters will still have a sour taste in their mouths from the spate of US bankruptcies, they don't like that, it is the serfs who are supposed to swallow it.
In the 1980s, as a young man, I worked the oil rigs in the Bakken. Work hard, play hard, spend hard, and drink hard. As that play wound down and rigs were being parked idle in some farmers field, there was a popular saying; "Please God, give us another boom! I promise not to piss this one away!"
After 30 years I find myself back in the Bakken, older and wiser, and I am hearing the same thing. (to me, a sign the shale play is on it's way out) I haven't "pissed this one away", but so many have. Lots of pain coming down the pike.
I have several buddies in the oil patch. Big trucks, whores, whiskey, meth, a new manufactured home for the stay-at-home missus and kids back on the farm, at least 4-6 hours drive away for the week off. The ol' lady wants her own stash of cool shit, so do the kids. It all goes on the credit card.
100 grand a year in a job for young studs don't go far, but unemployment is way worse.
In the 1980's as a young man, I made the big bucks in the Bering Sea, pissed it all away, and now I'm a wiser dirt farmer.
This is going to go badly, and in a slow bad way. The slow-motion horror of the civilizational collapse we're in RIGHT NOW is worse than the bottom we'll eventually hit.
I'm out in the Bakken, too! Good luck.
To put it succinctly...
Wahabi(s) and Zionist(s)...
The Anglo-American way to pay for fucking yourself in the ass when you least want it for more than 60 years!
fooey, US energy policy has always been to avoid tapping domestic reserves, and buy oil on the world market. the Saudis are the conduit for US policy, in what sense of the word does it occur to anyone that SA pumping all the cheap oil the western industrial powers wants is NOT conducive to our interests? Iran goes broke, the US military machine stays filled up. the only anti-American fallout from this is crashing asset prices, the Fed cannot juggle housing, and stock equities, and even gold, if oil keeps dropping in price, thats too deflationary. good foreign policy, bad domestic economic policy, which one will Obama choose?
As asset prices tumble, the Rothschild banking juggernaut gets to buy more assets while "the blood runs in the streets" with their printed fiat money.
Hold on WTF? Weather the storm of $80 a barrel????
Have I missed something, we are BELOW $70 already.
Someone please explain what I'm missing????
Shale oil shuts down when below $80. Shut it down and cause shortages, then spike it to over $100 again.
You know this because you read it on a blog right?
As I understand it there are many different levels of economic extraction for shale. Some wells are unecomical at $80 but many more can still be profitable at even $60.
Venezuela was bad with $100 oil. Now, she will catch fire and burn with oil below $70.
utter nonsense. They will just do more bi lateral sales to China. Yes its expensive, but the regime will stay in place. They owe 86BN USD in debt (Ven and PDVSA combined). They are sitting on 9 Tn in P1 and P2 reserves. You do the math.
Look for the Saudi role in 9/11 to suddenly be released.
The Saudis and Rumsfeld and Cheney are married by their crime but you are right the oil wars are probably more important
More great news. If the NWO begins to fall I'm asking the military to make sure they put Loyd Blankfein and the treasonous politicians behind bars.
Russians don't celebrate Thanksgiving, fools - except perhaps by selling off the oft-troubled currency (down to 48.3 rubles/dollar currently).
So get back to work on those citizenship applications!
In recent days, Putin has blamed "speculators" for the ruble's declining value against the Dollar, Euro and Yen:
"We have seen speculative fluctuations of the rate, but I think it will end soon in the face of action taken by the central bank in response to action by speculators."
But recall that back in August 1971, Nixon said much the same thing:
"In recent weeks, the speculators have been waging an all-out war on the American dollar. The strength of a nation’s currency is based on the strength of that nation’s economy – and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators."
Watch joblessness soar as these smaller O&G companies lay off people and cut production and exploration.
Putin did it again.
This is has been planned by the US and the Saudis for their mutual interests.
The Saudis presented OPEC with a fait accompli
Israel will now put their plans to bomb Iran on hold and wait to see what happens. Is that such a bad thing?
Happy Thanksgiving ZH!
Careful where your information comes from....
http://newworldorderg20.wordpress.com/2014/11/21/u-s-chevron-enter-joint-project-with-russias-lukoil-in-nigeria/
http://newworldorderg20.wordpress.com/2014/11/20/russias-gazprom-already-part-owner-of-so-called-alternative-energy-sources-for-e-u-energy/
http://newworldorderg20.wordpress.com/2014/11/06/western-media-claim-russian-economy-is-collapsing-then-explain-these-contradictions/
http://newworldorderg20.wordpress.com/2014/11/14/russian-firms-are-making-a-comeback/
Boom and Bust Bitchez, thats how we roll. Turn that oil chart upside down and it looks just like the Transports. Financially engineered miss allocation.
Russia can't frac their fields either. They could have been number 1 producer.