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WTI Crude Crashes To $60 Handle As Saudis Shun Cuts
Brent Crude crossed below $65 for the first time since 2009 this morning and WTI began to slide as inventories showed a bigger-than-expected build. But it was Saudi Arabia's oil minister al-Naimi who sparked the latest dump:
- *NAIMI SAYS `WHY SHOULD I CUT PRODUCTION'?
And with that WTI plunged to a $60 handle on heavy volume...
For now Russia and Brazil have stabilized their FX somewhat but Mexico is beginning to suffer now among the oil producers...
* * *
Crude inventories rose 1.45 million barrels in the week ended Dec. 5, the EIA, the Energy Department’s statistical arm, said.
Analysts surveyed by Bloomberg expected a drop of 2.7 million.
The EIA yesterday reduced its price forecasts for next year while also downgrading its production outlook for a second month.
The Organization of Petroleum Exporting Countries reduced its demand estimate by about 300,000 barrels a day to 28.92 million next year, according to the group’s monthly oil market report.
That’s below the 28.93 million required in 2009, and the lowest since the 27.05 million a day OPEC supplied in 2003, the group’s data show.
* * *
It seems once again that credit was right.
Charts: Bloomberg
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It is getting bullisher and bullisher.
Especially with those crews scrambling on Diego Garcia.
Alea, is that a joke or you know something?
Why should they cut production when our production has surprassed theirs?
good old fashioned price war. arabs pull it out of the ground for 20-40......they have huge competitive advantage. if US wants drill it for 60-80 (or more), they will have to have government help them. survival of the fittest--capitalism--supply/demand. oil exporters use the gains on oil to balance their budget.....so they will run a deficit for awhile-----thats so un-american to run a deficit. lets cry foul and get the PC police on the oil exporters.
It's all good until they run out of cash because they are spending $80 - $100 per bbl keeping the 'people' happy. When cash gets low, price will rise again.
I'm going to open a chain of tire rental places in 2015 (search it - it's a real thing).
I'll rent new car/truck tires & wheels to the bottom 60% for 5x what the same new tires would cost to purchase, since they can possibly afford $80 per month for 54 months, but can't afford $600 to $1,200 up front.
Business is BOOMING!
(Jewy's House of Tires)
How much for a donut spare? My brand new (never used), 12 year old donut spare blew up only 8 miles after I put it on. It seems that tires age regardless of usage (friggin entropy!).
I'm thinking I might come out ahead by renting a new one every year, instead.
If the price is right.
http://www.rnrwheels.com/
This business and others (I think Aaron Rents has a spinoff wheel rental biz also) have been booming in urban areas for the past few years or so.
FFS, I had no idea.
That would be an interesting product to repossess.
Easy to repossess, and not even bankruptcy discharges the debt!
http://articles.latimes.com/2013/jun/08/business/la-fi-rent-a-tire-20130609
Not if I rent you locking wheel nuts.
You'll have to rent those from me, too, in order to naively try to defeat my plasma torch wielding repo crew.
Miller: "The life of a repo man is always intense."
Many areas in west Houston (Cinco Ranch, Sugar Land, etc) have property taxes of ~ 3.5% that are coming due ~ Feb 1, 2015 my cousin tells me. That’s going to bite those Middle Class folks with >$500,000 houses [like my cousin who jumped on a $784k house – against my advice!] and as more O&G people [including engineers --- like my cousin] get the ax, they are going to have a miserable time paying their taxes, mortgage, food, new iCrap for the kids, and so on.
I tired to explain to him it’s all part of Barry’s Robust Rekovery; he’s luckily paying attention [and also started reading ZH !] and getting his resume together and is already looking at some job prospects overseas.
He is just one story out of the hundreds of thousands of Middle Class Americans who will be thrown out of work by the current misguided policies. Luckily he has tenacious and industrious Loki Blood in him, so he should do ok.
Lol, how the fuck do those people not have enough money for tires? A nurse and a prison gaurd...either dumb as shit or full of shit.
I'll cut you a kosher deal; $0 down, $25 per month for 54 months, with a lien on your kidneys & liver.
Only $25!?!?!?
WHERE DO I SIGN??????
Extended warranty! What a deal!
"That tru-coat is put on at the factory."
Shylock Tire Co.
http://tentofabraham.files.wordpress.com/2011/08/shylock.jpg
TruthinSunshine,
Very interesting concept!!!
Couple of real world questions:
How much up front extra capital is required relative to a traditional tire service company since all of the labor and inventory is not free and cash flow dribbles in relative to the traditional model.
What is your percentage of budgeted bad debt. Seems it would be very high!!!
How do you repo? You have claim to the tires but not the wheels. Unlike a car which repo has claim you only have claim to a piece of the car.
It seems that if repo cannot be properly addressed a lot of people will simply stop paying without any recourse on your end.
Not threat of penalty for default leads to lots of default. 2007 has taught this lesson exceedingly well.........
http://articles.latimes.com/2013/jun/08/business/la-fi-rent-a-tire-20130609
You take EBT?
Meet in back alley. I give you 22 cents for each Yellen of credit on your EBT card.
Will the last person not in debt to the swine please turn off the lights.
The Zionist banksters bought the Unconstitutional monopoly for the stealing of our deposits, counterfeiting our money, and "funding" the DC US governmnet. All of which undermines the economy and robs the American people of their production from labor and capital. Yet, is is not enough for them.
Then as the economy falters because of their thefts, they further destroy the economy by "printing" high priced debt money they then use to further enslave the American people, the victims of their first robberies. Is it yet enough for them?
As the economy then lists and sinks ever closer to the water line, they are there, once again, with even more "printed" debt at even higher prices. Like dousing a sinking ship with water, they are there to finally push the American people under the waves of their "printed" debt. Can it now even be enough for them?
The destruction that the Zionist banksters rains down on the American people, destroys the people, but preserving their property for the Zionist banksters' benefit. Like a neutron bomb of debt dropped on the American people, killing them, destroying the country, but leaving the remnants to the destroyer.
Is it yet enough for them, the rapacious swine?
An American, not US subject.
Are you talking about the pending false flag with the "lost" airliner MH370 which landed on Diego Garcia?
yeah no worries the consumer now will SPEND all the money saved on oil.......watta great country
SPEND on debt reduction, gold and silver indeed
Not to mention, a tastier brand of dog food. Or with the holidays coming up, perhaps a pink-slime feast?
Best country in the world to be a debt slave.
Obama just called Yellen to see if they can print Oil!
You guys can see through this shit show again right? With the Saudis saying "Why should we cut production?" This is all a cover for the underlying theme. To crush Russia...and I don't like it. I would bet my entire sunken boat load that there are some back room shit deals that say "Just let oil fall and fall and we got your back..." Putin knows exactly what is going on. And all of us need to pay close attention to the distractions. Yesterday, they had that faggot Gruber talking...OMG...that guy is the biggest loose cannon for Obamacare ever. WHat the fuck is he doing....After watching him get led right down the verbial slaugterhouse by some of these Senators.. (Many are attorneys) He really should of pleaded the 5th. Now...as I am watching that Shit Show, on the other side we have that cunt Feinstein suddenly throwing the CIA under the bus for torture. I am thinking to myself...something is very wrong here. Then, deep down on Drudge...Oh they are ramming the 1.1 Trillion dollar budget up our ass, and the distractions are in full swing. Was that what all of the distractions were for? Or something else? BIG dollars in the budget for Harry Reids Casino Kick Backs for donors. Watch the video of this prick on this link. These people have the sheep so fooled......
http://www.breitbart.com/Big-Government/2014/12/09/Omnibus-Contains-Casi...
Agree.
Lesson to be learned: Always be the wolf.
In the end it is us and Russia who divide the spoils.
Saudi looks more and more like a short timer.
Big party headed down there too. Should be fun.
If Putin cared at all the entire eastern US coastline would be on fire. He doesn't care. He is on board for this, likely to do somthing with that 80 billion euro bill that got delivered. Base that bill on 40 dollar oil and suddenly its 40 or 30 billion hell it might even be settled out for 10 billion or less.
Gruber sure was a darned good liar for a white guy.
Much better liar than Biden, but far below Obama capability.
If you THINK the Obamacare thing has been a disaster so far, you AINT SEEN NOTHING YET
This year the peanaltities go into effect, and if you look at the Obamacare sign-up rate, and a LOT of people are going to get hit with HUGE penaltities. A lot of people spend their tax returns or pay down debt, now this is not going to happen due to the obamacare tax, and it will be a big drag on things.
They need some cover to pull or majorly reform Obamacare so they march this Gruber fucktard and have these hearings and such and hope anti-obamacare setiment gains a lot of traction.
Then they march out this "torture report" so they can shout BUSHitler! BUSHitler! BUSHitler! and distract people from Obama's complete failure and the coming next leg down in the economy and Obamacare. Only problem is people already knew this torture stuff and / or don't give a shit so it's didn't work too well as a propaganda effort.
I read there's quite a few hospitals that still have not decided to take all the plans under Obamacare; I'm guessing they are not going to take the tungsten plan where docs are paid 2 cents on the dollar and then sue the doctor when he can't make then thin, smart or beautiful again.
That law has NO incentive for people to stay healthy ... among its many other flaws.
"That law has NO incentive for people to stay healthy ... among its many other flaws."
Obamacare has two flaws: If a tax, it is Unconstitutional. If it's a mandate, it is Unconstitutional.
Enforcement of it is treason.
I guess that that is three, but who's counting?
The other treason shoe of Obamacare: http://www.weeklystandard.com/print/blogs/feds-plan-35-agencies-help-col...
An American, not US subject.
Treason and guillotine rhyme.
peak finance, yes, we've been expecting people will be shocked shocked when the penaltities begin to appear, but i've wondered about the CIA farce yesterday. do you think it's possible EKM is on to something and the pentagon and the bankers are battling. clearly the obola administration has thrown the CIA under the bus---as if they can manage to walk away from that one clean! but i've overheard conversations where the spin may be working.
Heard in my backyard this morning: "We're going to need a bigger guillotine."
An American, not US subject.
Gas in my neck of the woods is at $2.23/gallon and dropping like a rock.
Is that for the real deal? Or the corn infused shit?
Still just below 3 for regular here.... shit I just paid 3.70 for premium 2 weeks ago. No BIG savings for me.
93 here is $2.81 at Shell.
Ethanol is usually a summer thang around here,
but it's surprisingly hard to get a straight answer on that.
At this point, they'd be better off 'crackin the corn for moonshine.
Then again, it's ALWAYS better to crack it for moonshine.
Pretty soon we'll be getting another 'EXPOSE from Paul Mylchreest to tell us that the TRADE has been to PAPER SHORT crude while going long PHYS moonshine.
Me thinks the Saudis are too busy sending all thier oil to China to bother with cutting production.
Whoop, there it is!!
It took 50+ comments before someone seeing the big picture nailed it!!
The Saudis already know what the rest of the world is quickly coming to terms with.........the USD as reserve currency is over!! They have decided sometime back (my guess was bozos election) that they have a new dance partner, and all that remains is trying to let the old one down easy, so he doesn't go into a drunken rage and start tearing the place up, before their new boyfriend shows up to exit (us) him from the region!!
Oil at 30-40 is still fucking crazy profitable for them, how will it be for the over leveraged shale Boyz, that's the trillion dollar question, we are about to find out!!!
And the Chinese will pay for it with exactly what? US dollars?
Here's a thought. Maybe SA can't afford to cut production. Maybe they've wasted the greatest opportunity any nation ever had to become a modern industrialized state and they are slowly sinking in a sea of sand, hubris and 50% water cuts.
Why are their reserve numbers a state secret? What happens if they cut production and the price stays where it is because global demand is falling and will continue to fall because the entire world is in depression and doesn't need their stinking oil?
If you were China, would you deal with the bedsheet princes when you already have Iran and a deal with Russia, both of whom have more capacity to accept your exports in trade?
These are just some of the questions I ask myself when looking at the bigger picture.
$2.50ish per gal in tucson for regular
$3.35ish for diesel....this is the one i need to see drop.
2.19 here, was 2.49 when I filled up to drive to Michigan 2 weeks ago.
My neck of the woods gas is down to 1.38. How about that eh? Oh, by the way, that's per litre.............in Euros!!!!!
TSLA down 6% .. strong buy ! ... hehe
Sell paper oil, buy the phyzz.
What happened to that guy who knew a guy who thought he overheard somebody in the House of Saud say things would level out around $60/bbl. Not looking like a "leveling out" happening here.
It's the new normal.
Your wings are level in a power dive;)
Anybody have the quick and dirty for why TPTB are doing this?
Is it to kick Russia in the nuts?
Probably.
Like a novice with nunchucks their own nuts are next.
Either that or someone wants to bankrupt the shale natgas and tight oil operations before the resources are depleted and then buy them up at ten cents on the dollar.
Could be. But it seems to me whoever wanted to make that play would have to get the OPEC members on board. I think it's more likely a US play against Russia, with the cost being the US doing the war dirty work in the ME.
the bankers are likely doing this for both reasons. plus they can bail out japan and bail out the gold miners for the next couple years with cheap oil. after that there is no plan. theyll probably have to use their nukes, but that will not save them from roving gangs of vigilantes
True, I don't discount that there are multiple reasons. And I'm sure they like that it'll bankrupt venezuela too.
My point is mostly that the ME OPEC members are taking it on the chin and giving up a collossal amount of money by not restricting supply. To have them do that it would take a lot. There have to be larger geopolitical reasons for OPEC folks to eat shit on this. Like, really big ones.
yes i think the number 1 reason is to kill putin.
but saudi is also (stupidly, imo) worried about shale growth. saudi regretted cutting production in the early 80's when they later opened the flood gates in '85. saudis were probably also buying deep out of the money puts before this shit started.
Wrong, it's to kill the US, Putin is playing along fine with everyone, it's this fucking country that "out of control"!!!
The Saudis, Putin and China all want the same thing, a new boss in town, and the USD to cease to be the WRC without blowing up the whole place in the transition, THiS is what's really go on, but Jesus Christ even on ZH only 1 and 10 can come to grips with this shit!!
Why would China, Saudi, Russia want to pull the pin on the US when they own a combined 4+trillion in shitty US Tbills. The US is imploding just fine on its own. I would think that China, SA and Russia would want to convert all their shitty US paper into hard assets before pulling the pin. Lots of oil needed for war, maybe this be the final prep, or insurance.
Last 2 comments... "someone"... & "it seems to me whoever wanted to make that play would have to get the OPEC members on board"
Let's see...
What's the common denominator between:
- 'crypto' Wahhabi's
- New York counterfeit money printers with their hand on unlimited leverage in paper shorting
Thinking, THINKING!!!
All the above, but the USSA has always structured to kill off competition of the big boys. No way an inbred Exxon management compete with the entrepreneurial types. Do som research on the tax exempt foundations, Rockefeller, Ford, , etc., and their myriad of dastardly deeds with the alphabet agencies, especially the EPA.
There's an agency to shake down the competition in every major phase of commerce. The criminal FDA also comes to mind. The smaller crumbs are gobbled by the up and comers through ordinances, licensing, and zoning.
Fuck a "Certificate of Need" for a hospital. One doesn't have to trek all the way to the Northeast to find pitchfork fodder. There's plenty of shit around your own hacienda.
Wouldn't doubt it with this administration. Obama is thin-skinned and can't stand Putin making him look weak. Never mind what's best for the US, just get Putin. Petulant man-child.
From a gold bug's perspective, I don't care who's nuts are getting kicked as long as it's not currently mine. Time to share the owies.
Obligatory Ow My Balls here --------->https://www.youtube.com/watch?v=r_4jrMwvZ2A
this is entirely about russia and not helping the US consumer
help yourself and get net short on the canadien dollar
Could it be that all the good collateral for leverage is slowly being drained out of the pool?
Yawn... The oil crash won't be over until the last of the U-hauls leaves North Dakota's Bakken oil shale fields and the former oil shale "tycoons" are having to pimp their daughters, wives, and boyfriends in the back alleys on Wallstreet to pay off the banksters they barrowed money from. After all is said and done, a Saudi refinery will then mysteriously blow up and oil will be once again at $100.
Putin and Russia are just convenient collateral damage that may help the Suadis and Qataris topple Assad so they can build the gas pipeline to Tartus for gas export to Europe.
been making good $$ shorting the CAD and its crosses
on an intraday, this move appears substantial
on a weekly, this move was forecast
http://bullandbearmash.com/chart/wti-oil-weekly-dow-14-trend-continues-f...
support near 58
Whose bringing the price of oil down? The Saudi's or the U.S. or are they collaborating?
Demand on a down slope and supply on an up slope...
I'm just gonna say it. I have no idea what's going on, who's doing it, or why. Either the gods are making new oil for human beings or something insane is going on here. Qui bono? I have no fucking clue.
+1 for being an honest man.
I'll just go out on a limb here and extemporize upon your brilliant admission by saying that I suspect some entities are leaning on the price for percieved self-interested reasons, but have probably miscalculated the result of their intervention by a wide margin, and will be taken full advantage of by the banksters financing their shenanigans. In any case, even the Fed will likely have to admit that plunging oil prices are deflationary.
Have no idea either and don't really care, I'd just like to try and make a few bucks off it somehow.
This is not about Russia or killing shale drillers, this is about oversupply, manipulated markets, and crashing economies worldwide.
Wake the fuck up. The edifice of debt is cracking and crumbling. It's about fucking time.
Crash this bitch, I'm ready, though I'd like to have another 200 ounces of silver, but, I'm good with what I have. If silver rises, fine. If it falls, I'll buy more. It's good to be liquid when everybody else is broke.
I can find 200 oz silver by visiting a few rummage sales.
@FreeNewEnergy
i would agree but since OPEC is complicit in keeping the spigots open and the price dropping then i have to believe that end game is near and the world as a whole is in for change.
i can remember OPEC dropping production and ramping prices in the past and this time is different.
on a side note; i can see the saudi's wanting to hurt russia too though. they are competition and i bet they can hold out longer than russia can.
weird stuff indeed, just stock up on necessities and be ready to defend your waterhole:
https://www.youtube.com/watch?v=ER4BHHv1cto
Crude back to new lows 60.91, oops, 60.84, oops, 60.64. Going for popcorn:
http://www.investing.com/commodities/crude-oil-advanced-chart
Maybe they will leave gold alone for now.
Hopefully, but the Tribe is an evil ruthless bunch.
Like in Training Day....'Oye vato, he's an evil ruthless pendejo! I like heem!'
Of course that guy got shot in the face like 5 minutes later anyway.
The central banksters will never allow gold to rise, if they can help it.
The fact that gold is on the rise tells me they are having to throw everything they have at keeping the conventional markets up.
Once conventional markets are back up, then they can turn their attention back to bitch-slapping gold.
They need unlimited quantities of gold so they can sell unlimited quantities of gold. It looks like a paradox until you realize they are stealing and cheating to get the unlimited quantities of gold to dump in the "regulated" open market. Then you know they are just doing normal Western banking.
And thus, cartels never work.
The same question every member of a cartel scheme always asks "why should I cut production?"
It's always been true.
Now if only the G8 central banking cartel understood that about their fiat money production.
I don't invest in oil or oil related industries... but the plunging market price is certainly helping bring down the cost of diesel... filled up the truck last night - only $3.17/gal
Did CIA torture Naimi?
White Swan covered in Black Oil = Black Swan.
Now it makes sense.
This is solely about trying to punish Russia...basically it is the only way they can fight back...per usual these myopic clowns are going to end up making things worse for themselves.
Nothing will divert the 11:30 am NYSE game of catch-the-falling-knife from a bad ending:
http://www.investing.com/indices/us-30-advanced-chart
Forget about December inventories. Refiners make all sorts of year-end adjustments so those numbers in December are useless.
Bullish: Random explosions at refineries and pipelines.
Stupid Saudis are pissing up a rope. They wish they had shale. Here are the facts from Texas. Shale isn't a bubble and it's not going away but the Saudi ability to keep taking losses through lower prices is.
The most number of producing wells in Texas was hit in 1985 with 210,477 wells producing 2.28m bpd.
In 1980 there were 175,673 wells producing 2.583mbpd.
So during the "oil boom" when prices were over $20/bbl for a few years in the early 80s, 35,000 new wells were drilled resulting in a production decline. Hardly seems profitable and it resulted in a spectacular bust because it was a bubble.
In 2008 there were 156,588 wells producing 947k bpd
In August 2014 there were 185,180 wells producing 2.53m bpd.
The 28,592 new wells are averaging 55 bbl/day while the old stuff operating in 2008 were averaging 6 bbl/day. The new wells drilled in this boom have resulted in a return to production levels that haven't been seen since the last boom started and all the new wells didn't even maintain production.
So what does that tell you about the productivity of new wells drilled today vs those conventional wells drilled in the past?
You think the Saudis are right to be shitting their pants? You bet they are and for good reason.
The last time production in Texas doubled it took eleven years to do from 1935 to 1946. This time it happened in three years and it's still climbing.
TEXAS HAS NEVER SEEN OIL PRODUCTION INCREASES LIKE THIS BEFORE IN IT'S HISTORY. Go look at the data for yourself
http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/historical-production-data/crude-oil-production-and-well-counts-since-1935/
Pissing up a rope?
https://www.youtube.com/watch?v=u7h9X2l9lF0
There is always a nugget to be found on ZH of bizarre reasoning and absolute foolishness. "Shale isn't a bubble and it's not going away" - is up there with the best ones!
thank you for the info wrs1, appreicate you sharing what you know with us
why all the downvotes for someone giving us real actual info?
No good collateral being put back in the pool now courtesy of the Fed and CB"s Have to drink your own pool pee water now. Damn no more 24k gold plated bugatti's for the camel jocks. Sure hate it for them. As for us that shale gas ain't going nowhere. The dynamics have changed my friend.
I still hold on to my proposition : kill the shale play so that the US become net importer of oil again, which will provide $ to the rest of the world and help counter $ ascending move. In the meantime, current holders of US treasuries will have to sell them. If played right, this could blunt an EM crisis, provide liquidity in the treasury market for the next round of QE, stabilize the $. Stock market and shale don't rank high in the big scheme of things. Shale was good to avoid too much trade deficit during the QE phase (and partially absorb the extra liquidity), but is not needed anymore (that is, until the next round of QE, when again the US will need to reduce their trade deficit to prevent a crash of the $)...
interesting theory...
- technically US is still a net importer now, just more I guess
- weaker USD means higher price for oil/gold and stuff priced in USD, and vice/versa, so technically you should have higher oil price with weaker USD, unless that's the future plan not for now...
- oh, maybe that's the reason gold/silver has started rising, they want the USD to weaken since monetary PMs have always acted as a measure of fiat worth, and they had to offset the USD strengthening pressure from falling oil(priced in USD), so letting gold up is it.
That would also explain the timing, happening right at the same time as oil is falling.
eh well, more shit to throw against the wall
What? Me Worry?
Y'know ... a lot of producers hedged to $80/barrel or $90/barrel for a year or so, so right now a lot of speculators are taking it in the shorts. The geopolitics of this plunge are generally good for the US. And it could all be engineered if the US fed promised to print for the Saudis. Qui bono? Hmm. I don't know qui bono, is the problem here, that is I don't know which secret santa could engineer it for himself, and I don't believe anyone in the US political system is competent enough to engineer it even if they thought of it.
So, who was short a whole bunch of oil futures, as of about two months ago?
Brent at 63 handle of a falling knife !!
Just recall a recent statement of Putin: "When brent will reach $50.-, the financial system will colapse".
Wonder whether this is related to what is being discussed on the Lima Climate conference :
http://unfccc.int/meetings/lima_dec_2014/meeting/8141.php
OIL still has a wasy to go to find some support. But even that support will only be temporary as prices will continue to slide into oblivion.
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
If US crude were to average about $70 per barrel next year, EOG Resources and Anadarko Petroleum would have debts roughly equal to a year’s earnings before interest, tax, depreciation and amortisation
http://www.ft.com/intl/cms/s/2/1fedfe66-7f9b-11e4-b4f5-00144feabdc0.html...
And in totally, totally, TOTALLY unrelated news:
http://www.zerohedge.com/news/2014-12-09/isolated-russia-begins-testing-...
#WhosGotTheDeeperPockets
why should saudi arabia cut production.... the oil costs them nothing and most importantly obumbler has shifted the ussa towards iran... so the saudis will realign thier willingness to accept other currencies in lieu of the petro dollar... its all part of obama's plan to take down the ussa... that is the CHANGE he really envisioed... and kindly explain how cheap abundant oil hurts an economy.... or is this more for the STUPID people... OK STUPID, WHEN YOU PAY MORE FOR GAS AT THE PUMP ITS BAD FOR YOU .... GOT IT... that extra discretionary spending is harmful.. to the economy.... got it ... ok