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Saudi Prince Warns "We Will Not See $100 Oil Again", Calls Anti-Russia Conspiracy "Baloney"
Speaking to his favorite money-honey, billionaire Saudi Prince Alwaleed bin Talal told Maria Bartiromo that the negative impact of a 50% decline in oil has been wide and deep. As USA Today reports, the prince of the Saudi royal family said that while he disagrees with the government on most aspects, he agreed with their decision on keeping production where it is, adding that "if supply stays where it is, and demand remains weak, you better believe it is gonna go down more. I'm sure we're never going to see $100 anymore... oil above $100 is artificial. It's not correct." On the theory that the US and the Saudis have agreed to keep prices low to pressure Russia, the prince exclaimed, that is "baloney and rubbish," adding that, "Saudi Arabia and Russia are in bed together here... both being hurt simultaneously."
Q: Can you explain Saudi Arabia's strategy in terms of not cutting oil production?
A: Saudi Arabia and all of the countries were caught off guard. No one anticipated it was going to happen. Anyone who says they anticipated this 50% drop (in price) is not saying the truth.
Because the minister of oil in Saudi Arabia just in July publicly said $100 is a good price for consumers and producers. And less than six months later, the price of oil collapses 50%.
Having said that, the decision to not reduce production was prudent, smart and shrewd. Because had Saudi Arabia cut its production by 1 or 2 million barrels, that 1 or 2 million would have been produced by others. Which means Saudi Arabia would have had two negatives, less oil produced, and lower prices. So, at least you got slammed and slapped on the face from one angle, which is the reduction of the price of oil, but not the reduction of production.
Q: So this is about not losing market share?
A: Yes. Although I am in full disagreement with the Saudi government, and the minister of oil, and the minister of finance on most aspects, on this particular incident I agree with the Saudi government of keeping production where it is.
Q: What is moving prices? Is this a supply or a demand story? Some say there's too much oil in the world, and that is pressuring prices. But others say the global economy is slow, so it's weak demand.
A: It is both. We have an oversupply. Iraq right now is producing very much. Even in Libya, where they have civil war, they are still producing. The U.S. is now producing shale oil and gas. So, there's oversupply in the market. But also demand is weak. We all know Japan is hovering around 0% growth. China said that they'll grow 6% or 7%. India's growth has been cut in half. Germany acknowledged just two months ago they will cut the growth potential from 2% to 1%. There's less demand, and there's oversupply. And both are recipes for a crash in oil. And that's what happened. It's a no-brainer.
Q: Will prices continue to fall?
A: If supply stays where it is, and demand remains weak, you better believe it is gonna go down more. But if some supply is taken off the market, and there's some growth in demand, prices may go up. But I'm sure we're never going to see $100 anymore. I said a year ago, the price of oil above $100 is artificial. It's not correct.
Q: Wow. And you said you are in agreement with the Saudi government to not give up market share?
A: This is the only point I'm agreeing with the Saudi Arabian government on oil. That's the only point, yes.
Q: Should the Saudis cut production if they get an agreement with other oil producing countries to take oil off the market?
A: Frankly speaking, to get all OPEC countries to approve and accept it, including Russia and Iran, and everybody else, is almost impossible You can never have an agreement whereby everybody cuts production. We can't trust all OPEC countries. And can't trust the non-OPEC countries. So it's not on the table because the others will cheat. The past has proven that. When Saudi Arabia cut production in the '80s and '90s, everybody cheated and took market share from us. Plus, remember there is an agenda here also. Although Saudi Arabia and OPEC countries did not engineer the reduction in the price of oil, there's a positive side effect, whereby at a certain price, we will see how many shale oil production companies run out of business. So although we are caught off guard by this, we are capitalizing on this matter whereby we'll live with $50 temporarily, to see how much new supply there will be, because this will render many new projects economically unfeasible.
Q: What about the theory of the pressure on the Russians? There's a theory that the U.S. and the Saudis have agreed to keep prices low to pressure Russia because of what Putin has done in Ukraine.
A: Two words: baloney and rubbish. I'm telling you, there's no way Saudis will do this. Because Saudi Arabia is hurting as much as Russia, period. Now, we don't show it because of our big reserves. But I'll tell you Saudi Arabia and Russia are in bed together here. And both are being hurt simultaneously. And there's no political conspiracy whatsoever against Russia. Because we are shooting ourselves in the foot if we do that.
Q: You said the price of oil will dampen the shale revolution in America. How?
A: Shale oil and shale gas, these are new products in the market. And we see big ranges. no one knows for sure what price is the breaking point for shale. Wells have a higher production cost. And very clearly these will run out of business, or at least not be economical. At $50, will it still be economically feasible? Unclear. This is a very much developing story.
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"Having said that, the decision to not reduce production was prudent, smart and shrewd. Because had Saudi Arabia cut its production by 1 or 2 million barrels, that 1 or 2 million would have been produced by others."
BULLSHIT
You are right <man of Wool>... it is pure BS!
So now, thanks to all these cheating OPEC & non-OPECs there will be an oversupply, reduction in demand
and an inventory problem. Or....
There is a big war coming and all those tanks, convoys of trucks, warships, fighter jets etc are going to need a lot of fuel.
This could be a race to get the last drops of oil before they all get bombed back to the stone ages.
The first phase of the war would be an economic hit on Russia.
Next, heavy weaponry and 'advisers' would be sent to Ukraine.
By Spring, another offensive could be launched at the break-away states.
Russia would have to supply covert weapons and troops to counter-attack.
This plays into the hands of the Controlled Western MSM, who would then paint Russia as the Aggressor.
The covert war NATO is building for will fail. Thus, what we just saw in France may be the beginning of Plan #2, A plan of increasing Muslim Terrorist attacks on Western Targets. This would help destabilize western nations, and infuriate the serfs. At some point, Ukraine will be thrown in as another 'battle front.'
The confrontation with Russia, added to a few terrorist attacks in the UK and US, could also be used to cover an economic crash. which is what I see as half of the purpose. Financial gain would be the other half.
Ukrainian news site, Nedelya-ua.com, ran an online poll among its readers asking "Who would you trust to govern your country?" Final results had 85% of the readers vote for Putin. Obama got 0%.
http://redpilltimes.com/ukraine-news-site-asks-reader-trust-govern-count...
Bath House Barry does not even govern the US.
He only does as told, signing documents and doing photo-ops or parroting a teleprompter.
Great gig if you can get it.
Baloney, eh?
Mechanically-separated pork, among other vile things.
Odd turn of phrase for a rag prince.
Demand destruction; peak cheap oil: the price goes down but the affordability decreases in tandem, as the economy shrinks heading into a breakdown and a war.
Why is he wearing a picnic blanket on his head?
Right. He's a prince and I'm from another universe bitchez.
Arrest him. People that live in hostile enviroments and have fantasies that they live in the middle ages shouldn't be allowed to have money.
Ohhh !!!! Those freaking Ishmaelites!! They can't tell the truth....not even if their lives depend on it. America is somehow compensating them for the price difference, it is obvious. I do believe oil may go lower and I do believe it will trade in the 30 to 40 band for years. But the reason is to break Russia and the BRICS. I don't believe for one second on what this freaking muslim is saying.
It would likely be in the neocon playbook to bolster Saudi and Shale oil.
From a political angle, I can only see this as an attack by the West against not just Russia, but also Venezuela.
If conditions deteriorate in Caracas, the Socialist government will be overthrown. The USG will benefit. It would be in China's interest to bolster Venezuela's finances in order to counter the USG attack.
An overthrow of the Maduro Regime would prevent Russia and China from establishing naval facilities in that country. The gambit to normalize relationships with Cuba would also create an opportunity to deny a large naval presence to these two countries in Cuba.
Yep. The BRICS, and its sattelites ( MERCOSUR ) are pretty much anti-American so you can't let them get too much power and independence.
Based on this article, one of two things happened when Karry made his now not-so-secret visit with the Saudis.
1.) Karry was able to use his diplomatic negotiating skills (lol) and convince the Saudis to lower the price of oil and this prince is lying through his teeth.
2.) Karry royally screwed up and stepped on his dick when meeting the Saudis and pissed them off so bad that they said, "Fuck you. You don't own us. Who do you think you are? We OWN the oil industry. We'll set our own price. See you at $45/barrel."
As much of a douchebag I'm sure this guy is what he says in large makes sense to me. My industry seems to be grinding along - putting out the paychecks but not seeing a lot of blue sky......
How much was a barrel of oil compared to an ounce of AG in 1932?
edit: Gold was $20/oz and oil was $14.83/bl.
edit edit: Why was the price of gold $20.67 for around 50 years from 1879-1929? http://onlygold.com/Info/Historical-Gold-Prices.asp
It is all a matter of volatility pal. Looking at price in itself is comparing apples with bananas. Today we have more volatility so the moves are wider. Back in the old days, when gold moved a few cents it was a big deal. Today we need tens of dollars to be a big deal. Just float the decimal point to the left on todays price or to the right on old prices and you will see what I mean.
Russia has listed transsexual and transgender people among those who will no longer qualify for driving licences.
Fetishism, exhibitionism and voyeurism are also included as "mental disorders" now barring people from driving.
http://www.bbc.com/news/world-europe-30735673
And?
Your Russian Fetish is showing!
Believe you me, I do not want you to come to Russia, nor drive in Russia...
Did you somehow read it as negative to Russia? Well, than I guess you don't agree your self to Putin regime.
There are two idiologies - collectivism (where state rules on what people allowed to do and how they should behave in every moment of their life) and individualism (where state is there to protect individual rights & freedom for self realization at every aspect of his/her life).
Guess whats Putin regime is.
Frankly, the West is becoming much too collectivist these days, we are definitely being told what we can do.
It's more the really annoying 'PC' Socialist version, which is most likely to sell your family to a certain annoying clique of criminal bankers, for a century or so.
Neither side is a gleaming example. But one is however, considerably better for most, and for opportunities. Is that freedom? To an extent, partially. Is it stultifying? Sometimes. Is it agreeable? No. But we're very hard to please too.
The BBC is the UK government propaganda disemination service. You can't believe anything they publish. Something I learned over the Scottish independence referendum.
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We already know all markets are controlled by various means including Algo.
It is US that is pushing price down. Probably using algo as ZH recently exposed.
It is not about demand and supply. Even if demand is going down, If my cost of production is high, I will seek higher prices. I will not sell cheap. But if there are plenty of producers ready to sell oil very cheap, where and who are they? Nobody. That is.
So, how can price go down? The only answer is bogus manipulated markets as usual.
America can o reduce price short term, and prop up (subsidize) their favorite Oil companies by buying bonds which they have been doing for quite some time now. (QE anyone?)
So, the ony logic about this Crude crash is that US is doing it. US has nothing to lose since Saudi, and even Russia follow the market price in the Off-take Contracts signed by major traders such as Glendora and Vitol and Gunvor.
Only Gunvor is Russian company and they were promptly dismantled by western sanctions. Gunvor Chief Timshenko sold his company just before he was sanctioned. Seems he had served his purpose for the Western financial interests and now have to move out for the new games starting now. But the contracts signed that links Russian selling price to market price are still in place.
So US buys oil for future delivery now at very low prices using traders.
Then Oil Stocks will be hold most likely in Rotterdam and many other storage facilities that they build in a hurry. I know of Gunvor associates were also hurrying in organizing bigger storage facilities.
Then prices will be jacked up later to reap fantastic profits. Nobody can do anything about this.
I wish I could Advice Russia and Saudi to stop following existing contracts. Use any reason to cancel them and start seeking direct market. Don't even rely on the existing Government company in which market players already installed their own stooges. I know that even Gazprom and Rosneft cannot be fully trusted by Russian Government. The game is rigged with enemies sitting at every level doing their own small part in this fantastic game.
But for anyone, thinking Oil prices cannot go down again.... my advice, don't bet on it.
If the USG is secretly propping up shale, we shall see. If true, the vast number of companies will keep drilling.
I would expect a token number to drop off, then...drilling as usual.
sometimes it's best not to put much faith in a guy with a red towel on his head.
" both being hurt simultaneously "
The Saudi's are basically supporting the lower price of oil by refusing to cut back production.
Funny how the price of oil fell off a cliff not long after Kerry paid the Saudi's a visit.
Certianly is one way to take money out of the Russian coffers and get the fracking competition back on US soil acceptable to much lower take over bids.
Yep! After Kerry and Lavrov talks went south America played the Saudi ( OPEC ) card. Who controls the bigger oil fields, controls the price. We control those countries so we set the price. Russia and the BRICS are a emerging power which can cause problems in the future. We are making sure they stay tamed.
This BRICS term is being extended too far. It's no monolith (I'm sure you know that, humor me).
India is not welded into some trade-block or some strategic arrangement in that group, nor is Brazil. It's not the valid way to look at all these countries in geo-strategic context. It is a basket useful to market and economic forecasts, maybe, in contrast to others.
That's about it.
China signed a Comprehensive Strategic Partnership Agreement (including free trade agreement finalization) with Australia right after the G20 in November 2014.
US and European posters andcommentators should take this on board. China is now a formal part of the Western strategic partnership picture, and that relationship is going to expand rapidly from here.
India is already extremely well disposed towards the West. India, in November, also said it was going to negotiate a free trade deal and strategic partnership with Australia, ASAP.
So the picture with these (biggest of) countries, in relation to the West, has evolved very significantly, in the past few months, financially, economically and strategically.
The strategic concerns of these countries meet and focus through South East Asia, and it's powered by ME and rapidly expanding Australian energy reserves. That's where their primary strategic future lays, that's what makes them tick, so keep it in mind.
Russia is going to become increasingly important to China, of course, as a major energy supplier (and neighbor), but Beijing is making it very clear that it intends to diversify its relations and its energy and resource options, and has now very boldly hitched itself to a Strategic Partnering with Australia. China really could do no less after its major competitors Japan, and South Korea, signed extremely generous free trade agreements with Australia earlier last year. If China was not in that game it would have had to pay much more for minerals and energy than Japan and S Korea.
So now the Pressure is on India to catch up, for the same economic competitveness and market access reasons.
Australia has not changed its relations with the US one bit and it is not going to.
China knows this and accepts it completely as a fact of equal weight within this China-Australia Strategic partnership.
In other words, China, Australia and the US just became a lot closer, Strategically, in terms of shared interests and aims.
Take note:
http://www.abc.net.au/news/2014-07-18/chinese-troops-to-train-with-austr...
http://www.stripes.com/news/chinese-troops-training-with-us-australia-in...
Reading (excuse the Krugman quotes at the beginning):
Why China Will Not Become the Dominant Power in Asia - Security Challenges, Vol. 10, No. 3 (2014)
"....China will be the first major economy in history to grow old before it grows rich...."
Indeed....
Best part of that interview was him talking about how it feels like they're in the Middle Ages.
"Those that hijacked our religion and try to eliminate them not only militarily. That's happening right now against ISIS (the Islamic State) by the Americans and their allies. But also mentally, educationally and culturally, also. This is a disease we are getting at now. This really will put us in the Middle Ages unfortunately. It feels like the Middle Ages right now. But I think that the world is united. I just heard, for example, (U.S. Secretary of State) John Kerry giving a speech in French, which was very nice of him to do."
"..billionaire Saudi Prince Alwaleed bin Talal.."
Prince, eh... If this monkey herd were not "friends" of US, they would be wiped out long ago from the face of Earth, to the relief of the Humanity. Toghether with all kuwaits, bahreins, and other creatures of the dead (and, thanks God, burried) British Empire of my boots.
The world is entering an economic slump thanks to the policies of cen. banks which have not fixed the causes of the 2008 crash. We were WARNED by economists, left and right, that all that was happening was kicking the can down the road. It is not only oil, take a look at other commodities to see the trend. World economies are being ruined by the crazy policy, primarily instigated by the incompetent imbeciles at the Fed Reserve, who need to be kicked out, and that includes the board of governors of the Fed Reserve too.
What bullshit. This is all about a supply-demand imbalance that can quickly change from the supply side. Indeed, even he acknowledges the current oil glut is a temporary condition orchestrated by Saudi Arabia with intent to shut in higher cost production, thus allowing Saudi Arabia to gain market share. If successful, the Saudis will be the first to curtail supply once demand picks up again. They will think nothing of driving oil prices to $200 to recoup the revenue they are losing now, and Prince Ali bin Allthetimesmokinweed will be beating the drum for their manipulative supply side strategy when it happens too.
I think it's to cut out US shale. 5th column over here support it, oligarchs got some bets on us oil compay defaults, lots of money to be made.
USSR was finished off by low oil prices 25 years ago. Same play likely ongoing now.
However, if war were imminent, Russia might want to stop US shale production before closing the straights of hormuz. US fucked then, Russia can produce plenty of oil. Can't move your armies around the world without oil. Clever judo move by Putin?
This bitch saying oil will always be down is akin to Buffet saying the stock market, esp coke and railroads will always be up. Don't believe a sociopathic pos talking his own book.
Won't work that way, huge glut, huge strategic reserve, can re-open production as necessary, can hold price where it needs it, and many countries keen to sell. Russia remains sunk.
Iran, GCC/F (in conjunction with USN and Western forces present in region) controls the Straits, not Moscow. Iran in relationship with western allies and is operating along with western forces against ISIL, and negotiating over uranium.
Moscow has little leverage, overall.
As long as Western forces don't try to take down Asad, or take control of Syria, then Iran will be OK with this, and West retains positions of strength.
The Iranians, Saudis, Iraqis and Turks want the West to keep hitting ISIL.
After the events of this week, they are going to get totally pasted.
blah blah blah
Who cares what you think
Mr Nothing aka Mr. Nowhere Man
https://www.youtube.com/watch?v=TGGphnDMVDI
The spangled dingbat farts again. What's the matter? Raining on your fantasies with facts? Get used to it.
https://www.youtube.com/watch?v=s0dvz07wJEU
...both in bed together...and being hurt simultaneously...
Sounds like some kind of kinky s&m.
It's pretty obvious that the Saudi's are intentionally hurting both the US and Russia. They are pissed at Russia for not playing ball with them and letting them oust Assad, and they are pissed at the US for losing it's nerve (thank God) at the big Syria showdown, and not helping them overcome Russia, and remove Assad. It's two birds with one stone.
The Saudis may be screwing the U.S. oil industry but it wasn't without help from our own State Department...
http://www.globaldeflationnews.com/has-the-u-s-secret-deal-with-saudi-ar...
Kunstler (the long emergency) has warned the OPEC countries have been lying about their true level of oil reserves for decades. He believes they don't have near the amount of oil they claim to have.
Of course he will say that oil will "never see $100 again"......what is the point of dropping the price if you give away the strategy and give a target date of when it will end...and oil will rise again. Insist on "never"....until the shale oil producers are squeezed.
As for "not squeezing the Russians"....once again it makes no sense to embark on a secret mission, then tell the press that you have done so. (Only the United States is dumb enough to do stuff like that...everyone else "denies" and acts insulted that you even asked).
what if Saudi Arabia and Russia were saving all of their +$80 oil revenues and "faking" domestic spending and NOT buying gold?
What if they were saving up to crush oil & US oil equities and buy up American oil too?
Would foreigners collude to get rich?
Saudis admit low price hurts, refuse to cut production - that says all we need to know.
Shell claims its shale is profitable at $40 a bbl.