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Is The Oil Implosion Supply Or Demand Driven? Here Is The Very Simple Answer, Thanks To Saudi Arabia
There has been much debate whether the crude price implosion has been due to excess supply or not enough demand. Here, courtesy of the oil minister at the world's largest crude supplier, is the answer:
- NAIMI SAYS DEMAND FOR OIL SLOWED MORE THAN EXPECTED: SPA
- NAIMI SAYS GLOBAL ECONOMY SLOWDOWN LARGELY BEHIND MKT PROBLEM
Which, of course, to anyone with even the most rudiemntary logic and charting skills, should not come as any surprise.
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Fuck you Bernanke!
so that chart means buy stocks? that would make a great hill for my kids to sled on too.
Another DEFLATION story
I call BULLSHIT!
I am sorry but the assumption that the decline in oil price was caused by a sudden change in supply/demand doesn't fit the data. The oil price decline mirrors exactly the raise in USD. The correlation is obvious to anyone who wishes to see it:
https://www.bullionstar.com/blog/koos-jansen/guest-post-we-are-headed-fo...
Furthermore, the drop in the Rouble is contrasted against other OPEC members's currency which remained comparatively unchanged such as the Kuwati Dinar and the Saudi Riyal. AAMOF, the Riyal has been pegged to the USD for ever with nobody caring. No my friend, this is economic warfare in it's simplest and most obvious form.
Grab your popcorn because the BRICS have a strategy and it might just work:
https://www.bullionstar.com/blog/koos-jansen/guest-post-russia-selling-oil-gold/
"I am sorry but the assumption that the decline in oil price was caused by a sudden change in supply/demand doesn't fit the data. "
No shit, couldn't agree more. Tyler! Tyler! Tyler!! You are wrong on this one.
Just on this one?
A saudi gvernment official is of course a highly trustworthy source. LOL! Their claims about NOT arming Syrian rebels and about haviung NOTHING to do with ISIL are also pure truth,of course. WTF?
Very nice article you linked. So china is saying that at most the dollar is still a transactional medium, just not a store of value.
Well, one of two isn't too bad.....
/s
Soon will be zero out of two
"For reference: the turnover of the market of paper gold, only of gold futures, is estimated at $360 billion per month. But physical delivery of gold is only for $280 million a month. This equates to a ratio of trade of paper gold versus physical gold to 1000 to 1."
Oh my.....
Political ego and protectionist driven
Mostly political manipulation driven.
China.
+ 1000
... keeps benefiting from low oil, low gas, low copper, low PM, and tROUBLED Russia.
Could all be a coincidence though.
Where dat IQ chart be at.
China in september or october consume more oil but that don't stop plunge. And i don't know why everybody talking about China.?! Even if China slowdown in growth rate, that is normal because they more develop, but that is enormous even on 5% from this base, they will consume more oil because growing middle class.
It's not simply how much China's increase in oil consumption is, it's how much China's increase in oil consumption is RELATIVE TO EXPECTATIONS. When viewed from that perspective, they're way off from where oil producers expected them to be.
The US, in comparison, is on a slow downward trajectory in oil consumption, but that's already known and largely expected.
From a global perspective, oil producers were expecting MORE growth in oil consumption (which didn't happen) and MORE disruptions on the supply side (which also didn't happen). This all happened at a time when storage facilities were already stuffed to the gills with oil.
Yeah, right. Kerry and Obama visited Saudi Arabia earlier in the fall to windsurf and play golf in the desert.
http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-sec...
Neither. It is economic war against Putin and Russia:
The Oil Coup
US-Saudi Subterfuge Send Stocks and Credit ReelingJohn Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)
U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.
Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war
http://www.globalresearch.ca/the-oil-coup/5420293
"Everything in the world is interdependent and once you try to punish someone, in the end you will cut off your nose to spite your face."
More bullshit.
How exactly is this secret deal also sinking the prices of copper and coal and a bunch of other commodities that are following the same pattern?
Sinking oil prices = rise in dollar. Everything is priced in dollars. Also the end of US QE means less expansion of money supply. Throw in less demand as evidenced by GDP slowdown. Voilà. Rise indollar cheaper commodity prices
Kerry now gives permission on pricing? lol!
Saudi's #1 customer, US, has replaced mucho, mucho Saudi supply with domestic production. Bangladeshis, Indians and Chinese can't up their incremental demand paying US prices. So the price falls to what can be afforded without money printing.
It's really that simple. No need for conspiracy theories.
Deflation
If GLOBAL slow down is occuring then why oh why are the markets now rallying. Because the FED says patience. WTF.
I don't think I'll be believing a word that comes out of that guy's mouth no matter what he says
The only people getting mortally hurt is the US shale sector. Everyone else is hurt but not mortally!
Interesting that all these smart people the US has in the oil industries could be so wrong about the ability for the shale oil to last. It appears that they are hugely off in their estimates as to how long each hole works or more accurately how fast each hole's performance degrades.
If you want a conspiracy theory, how about the US undertaking a fruitless shale endeavour, just to assist in the flooding of the oil market to hurt Russia and stop its pro Gold tendencies. Saudis are just Round II. But at the rate the US shale fields are crumbling, it has to play out fast!!!!
Excessive splooge pumping...
there is not enough demand to meet their excess supply
so why keep producing at the same pace....
Hmmm. Russia's economy is predominantly oil exports.. A falling oil price hurts them, enormously... Saud is our "ally". Saud agrees to punish Putin.
Or.. SA doesn't like all the competition from america and canada and the rest of the frackers. It costs SA much less to extract their oil, so they keep production high, drive down prices, and drive the competition out of business... much like standard oil did to their competition long ago.
It's both.
Saudi's really wants to kill the shale oil industry.
Saudi's wanted the CIA to call off the ISIS dogs before they took over the kingdom.
USofA really wants to kill Emperor Putin.
Operation Black 'Oil' Swan was green lit and Mr. Ed was there to deliver the message personally back in Sept.
Saudi's are proving themselves usefull, once again.
P.S. Mr. Ed is heading to S.A. this weekend to discuss 'Iraq'.
The fed will drop"transitory" and return to the good ol' Greedscam era of just a "soft patch" goldilocks economy.
Long Larry Kudlow "mustard oil".
If lack of demand is crashing oil, then the big lie of a global world recovery from 2008, driven by central bank money printing, is a lie.
Thus stock market valuations are an even bigger LIE!
Please show me where I am wrong here.
I dont know which lies to believe anymore............
Incredibly that ZH constantly posted this nonsense. In morning oil was up because USA, and despotic oil kingdoms from Persian gulf, want send message to Putin but he don't want to accepted now that and oil price plunge after. Everyone can track messages from Persian gulf despots and US agencies, they are coordinate and Yelen know that so she said: it's transitory.
Don't even try to find fundamentals or technicals, not exist.
Thought it was futures driven, not supply and demand.
Well I, for one, will take with a grain of salt whatever an Arab state has to say on the argument of supply vs demand...
Also, if Saudi is right. Excess capacity and a crash in demand. Then expensive oil, Fracking and Tar sands, Deep Water Drilling and Arctic Shelf Oil, these industires are fucked.
Tar Sands oil cost 10 time more to produce than Saudi oil
Fracking run from 5-7 times more to produce than Saudi oil
Ocean drilling can be a wide range, but is many times more expensive than Saudi oil.
If you are long Junk Bonds of the frackers and tar miners, you are screwed.
For the time being.
Also in addition to the cost of Fracking, the reduction in performance of the holes is way beyond what was originally thought for Fracking. Since we have paid for those with Junk bonds, they are hosed.
http://www.dailykos.com/story/2014/11/28/1348011/-U-S-Shale-industry-abo...
Of course we can bailout all that industry as well.
Yes let's listen to some fucking royal asshat from The house of Saud.
B-bu-bu-but CNBC, the Fed, and the Obama Administration are saying that the U.S. economy is going gangbusters and achieving escape velocity...
Naturally, if SA were manipulating the price of oil to use as a weapon they would just say that and not use the economy as an excuse...
Saudi output has been constant over the last 2-3 years, it's lack of demand that is driving down prices.
Wait just a Goddern second. Remember ISIS selling black market oil at a 3rd of the price? That's what it is. Thanks, ISIS! It's the ISIS stimulus.
Crude Oil creates large bearish wick yesterday, another today?
http://investmentwatchblog.com/crude-oil-creates-large-bearish-wick-yesterday-another-today/
so 1/2% in gdp growth equals 50% cut in the oil price, got it, moving along
Well most of the shale haters are happy to grasp any nonsensical explanation no matter how stupid it is and the writers here continue to churn them out or repeat them as published elsewhere.
And you believe him?
There is something slippery about this premise.
Gas Prices Will Spike in California Jan. 1, 2015 Due to Cap-and-Trade.
http://www.breitbart.com/california/2014/12/17/gas-prices-will-spike-in-...
http://investfts.blogspot.co.uk/2014/12/oil-charts-look-ominous.html
OPEC won't control oil as price action proved today. Beware further lows into 2015.
Of course, global demand for petroleum has shrunk as a result of the global economic slowdown. But why did Saudi Arabia not support a normal OPEC reaction by reducing output? Their objective appears to be to bankrupt Russian producers and American frackers. Is this the way "friends" treat each other? What did Kerry say to Abdullah on his recent visit?
Somewhere there is surely a chart of monthly oil shipped in millions of barrels? And data showing where it goes? My understanding was that since 2007, USA oil consumption has dropped by 10% .
https://ycharts.com/indicators/saudi_arabia_crude_oil_production
as a starter, showing flat Saudi output
OIL has succumbed to the deflationary collapse which will eventually swallow everything including the stock market which is so evidently in denial of the real world...
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
who cares about supply and demand if you have free unlimited money supply to speculate to infinity ?
Not sure if the genius who wrote this article realizes the economy is growing and not contracting and furthermore that the growth estimate didn't even drop a full percentage point while oil dropped 50%. BZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZT wrong correlation
So why has saudi oil production output risen 1.5m bbl/day in the last five years if there was no increase in demand?
Libya? Iran sanctions? CIA/GCHQ/MOSSAD/SA induced chaos in Iraq? Nah, I guess that had nothing to do with it. Particularly Libya...
"There has been much debate whether the crude price implosion has been due to excess supply or not enough demand"
This is nonsense. These are two sides of the same coin. In a properly functioning market, supply should be matched to demand, increasing/reducing supply as appropriate. What's really happened is that with the fall off in demand due to the global slide into depression, supply has not been reduced, hence the price collapse. An even this is more political than anything else as we know.
Oil stocks are a gift this holiday season...biggest gift Obama could give to the market and economy. Give some to your friends and family...makes the perfect stocking stuffer!!!