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Saudis Re-Unleash Oil Weapon, Slash Asia Prices By Most In 14 Years
"This is further evidence that they are hellbent on protecting their market share in China," warns one strategist as just when US talking-heads thought things were 'stabilizing' Saudi Aramco slashes its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks - the biggest discount in 14 years. As Bloomberg reports, the desert kingdom is continuing to fight for market share, and using the oil weapon by "trying to stay competitive in what is the biggest area of growth," as Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia.
Biggest discouint to Asia since records began...
Saudi Arabia, the world’s largest crude exporter, cut pricing for March oil sales to Asia, a sign that the desert kingdom is continuing to fight for market share.
State-owned Saudi Arabian Oil Co. lowered its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement Thursday. That’s the lowest in at least the 14 years since Bloomberg began gathering data.
“This is further evidence that they are hellbent on protecting their market share in China,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $2.4 billion, said by phone Thursday. “They are trying to stay competitive in what is the biggest area of growth.”
Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia. China was the world’s second-biggest crude consumer after the U.S. in 2014, according to International Energy Agency data.
...
Saudi Aramco, as the producer is known, cut differentials on each of the four other grades it sells to Asia, its largest market, and raised them to the U.S., northwest Europe and the Mediterranean region, according to Thursday’s statement. The discount on Extra Light crude to Asia also dropped to a low of at least 14 years and Arab Medium was cut to within 10 cents of its record discount for buyers in Asia.
“Asia is still the market that they want to keep, so they are pricing to keep the crude attractive,” Olivier Jakob, managing director of Zug, Switzerland-based researcher Petromatrix GmbH, said by phone Friday. Saudi Aramco increased pricing to the Mediterranean region where “demand has been good because refining margins are good,” he said.
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“The U.S. used to be the market the Saudis were most concerned about preserving market share in, but that’s no longer the case,” O’Grady said. “China is where they see growth coming from in the decades ahead and the U.S. is also producing a greater share of the oil it needs.”
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Another weekend, Friday night, maybe nobody'll notice piece of unimportant ancillary to the future of mankind news.
For some odd reason, it brings the old phrase to mind; "Just when you thought it was safe to get back into the water."
Hurt me with the cheap oil again!
Please!
China does not need Middle Eastern oil, it's all Russian from here on.
The Trans-Eurasian Pipeline is the death of the middle east.
Anthem hacked.
http://www.tomsitpro.com/articles/anthem-data-breach,1-2441.html
Centralized medical data (Obamacare) = smart.
thanks for the heads up
Perhaps Saudi is trying to displace Russian oil to China to prevent petrogold ignition.
at 90+ million bbls consumption daily i think that SA has a market somewhere.
why they think they own the market is beyond me, ha. simple solution is to behead half their population for the greater good. then cut production in half and decry sex as unholy in the name of alah. of course they the rulers can still have umteen wives and spread their gene pool as royalty. the price rises, welfare drops and everybody still alive can fart in silk.
Pipeline or no, orice matters.
Not just the oil. The Russian natural gas is how the Chinese will solve their horrendous coal pollution problem and that problem is very high on the Chinese radar.
But didn't they say we should be afraid of 'Peak Oil' at one time? LOL
https://m.youtube.com/watch?v=2cUg3lDgJ20
Longer, more detailed version -
https://m.youtube.com/watch?v=XXnUD2-joAc
That scam was based on 'not enough' of something. The next scam they're pushing is based on 'too much' of something - - - carbon freakin' dioxide.
Of course, there's always 'too many' enemies of various types 'out there', that gets the sheep and many of the sheep dog types all excited.
Are we beginning to see a pattern here ?
Greece given 10 days until Feb 16th to accept bailout or exit euro. US markets closed Feb 16th for President's day.
what piece of news?
So... Asia becomes oil exporting?
Buy oil in Asia ship out and store elsewhere?
Didn't we just get an admission the other night that the Saudis are cutting prices in order to put pressure on Russia to abandon Syria? I guess in a sense that is "market share," if by "market share" we mean world domination.
Oh well LTER, gotta expalin it in terms that the plebians can comprehend. Kinda. If we told them it was all about the inerpaly of competing gas pipelines form Russia and the Gulf into the EU in conjunction with the Petro-Dollar recycling and privilige, then we'd loose 'em cold.
Syria?
Where's Syria.
You can't be Syrias!
Har har har.... Marge, bring Hal and me s'more beers
Surely, you can't be Syrias.
Paging Captain over, please pick up the white courtesy phone.
Captain Over [picking up the red courtesy phone]
Operator: "no, the white one."
Well someone has to say it; "and don't call me Shirley."
No, you got a supposition the other night, a half baked theory born of agenda and bromance.
I'm with you that the Putin bromance is out of hand, though I've questioned my own conviction from time to time that he's a puppet. Even if he is, the oil price drop sure as fuck isn't from supply and demand. There have been some incremental changes over the last few years in those metrics, but nothing to explain a halving of prices in a few months. Whatever is going on is not just about the Saudis wanting market share. If that were the case, this would have started a long time ago.
He is the same as O'Barry, are you not entertained?...lol.
The price of oil was artificially high due to the alignment of interests, Big Oil, Big Green Energy and a regulatory regime that caudles that outcome...read...Big Government.
We're a long way from running out of "fossil" fuels, a few people with rigs drilling on private/state land proved that and showed the entire world how the people are being ripped off.
Although all sides had the very best of intentions, right? ;-)
I see your point, but I still don't see an explanation for the sudden massive change in price.
Last time I checked, the interests you mentioned are still aligned.
The market was swamped in oil and they suddenly noticed...reality can only be lied about for so long. And yes, they are very much still aligned, can't think of the last time an oil refinery was allowed to be built.
Here ;-)
"The market was swamped in oil and they suddenly noticed..."
I readily admit I don't have all the answers, but I'm quite sure that isn't one. The oil market doesn't move overnight because someone suddenly noticed something.
You are right that is not the reason, but it wasn't overnight either. The price had been in gradual decent since July. The price got to the 2012 low at just under 90 and you saw inventory start to grow there. At that point all the futures holders dumped their futures down to 80.
The FX action and the stronger dollar combined with people not rolling over their futures contracts is the real reason for the massive drop more recently. The strong dollar is a negative for oil prices because "all oil is priced in dollars".
wait until the USSA military machine and NATO's antiques wind up, then demand will outpace supply and everybody will be happy.
Sarc
"All oil" is NOTpriced in US dollars....
Not any more, not by a long shot.!
Let me re-phrase then, production has far outstripped demand by orders of magnitude over months, as "the players" warily watched each other until one of them blinked & folded, starting the cascade.
Everybody who wants a higher oil price is now mad as hell at the Saudis FOR NOT cutting their current production to prop up a higher price. They are not pumping more, they are basically flat, somebody has been introducing more supply into the market for months pressuring the price downward.
And we all know who that is and they can do it again whenever they want ;-)
Bromance, I think not. It is more than that. A new term is in order.
Perhaps the term "Putmance" would be relevant to the Putin Mancrush team....
I guess the US isn't too pleased that China is paying Russia for energy and wants to try to get them to welch on the deal or drop the prices even more.
That's some broken thinking. People in the US would break contracts like that in an instant but they're dealing with a country that has a worldview timeline measured in hundreds of years. Dropping the Russia deal to get screwed again on oil two years later won't make any sense to them.
The Chinks must be laughing their asses off, getting rock-bottom prices for PM, crude and gas.
The West, and their Russian "BFF" are bleeding red ink, but China and India are laughing their ass off.
And Japan is still on the ropes, but this can't hurt.
This was on Thursday. Old news.
Whoa! A two dollar discount! The last one was a buck-fifty! Holy cow. All the crazy conspiracy stories are true! And they drop this on a Friday to get maximum effect when futures open...oh, wait, what? This is yesterday's news? Huh.
GG
As long as I'm on a sleep deprived, tree hugging and post recyling Friday night rager...
(...from the last time the Saudi's cut Asian prices for term lockups, and sailed VLCCs for China likes the Greeks sailed for Troy (Turkey)...)
In more ways than one... No one seems keen to mention that the Saudi Royal Family's Strategic Petroleum Reserve is located in China.
Unless there was some material adverse change between the planning and implementation phases (or the lawyers did something weird when drafting the JVs) - the King, or his designee, would stand to make money when oil is pulled back of the ground in China at a future date, regardless of whether they still maintain their control the oil fields in present day Saudi Arabia.
---
Any SPR on someone else's sovereign territory is a risky move, but in the case of KSA it was always about risk mitigation. Prior to the US invasion of Iraq they were looking at another facility perhaps 3000 miles from where they pull it out of the ground (among others). Storing the oil elsewhere, instead of the less expensive option of just scaling back production, hedged the risk of domestic unrest, the US adventure in Iraq turning south or the Straight of Hormuz or other shipping bottlenecks closing, and any wrenches the Iranians could throw in the works.
Why they (not so suddenly) changed the site to China after the King's visit in 2006? I'm not sure since I had moved on, but the Chinese were buying more oil, and certainly had more cash to finance their side of the transaction. However, in addition to the straightforward commercial/financial rationale, there are also geopolitical advantages to China, not least of which is the decreased ability of US to implement regime change in China and throw a wrench in the backup plan.
---
There is a huge amount of information (excluding signed contract copies) in the free public domain, but because it doesn't make for simple CNBS headlines, or help the Wall Street energy analcysts with their short term trade recommendations, at lot of the news stories tend go straight down the memory hole. But there are some people who do respectable jobs of analyzing the situation and aggregating various details for posterity (the people who have all the details almost never share, and when they do, it is always selective and always to advance a specific course of action, just like everywhere else).
http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D=3930
http://www.bakerbotts.com/file_upload/documents/ChinasNewEnergy.pdf
https://www.google.com/search?q=saudi+arabia+china+strategic+petroleum+r...
If the money is free, how does the "stuff" you later receive in trade for that money cost anything?
The only thing more dangerous than a bankster in pursuit of profit, is a bankster who doesn't even care about the profit.
The only question is whether the oil buyers are also persons of (strategic) interest (corporate or governmental) to The Party.
Currency pegs are funny things. None of this would be possible without the Fed's wanton increase of the money supply.
As it stands, you (and a lot of others) are paying for their crude oil shopping spree.
And the only way for the USSA or the banksters to beat "them" is to endure the pain and pay the piper, instead of kicking the can.
When Neocon geopolitics and Austrian economics intersect, you have entered the Twilight Zone.
Had not heard that, interesting, thanks for the heads up.
+1 for a new vocab word:
"analcysts" (LOL)
Knowing today's oil prices are complex, and taking into account the demand and new production that bloomed in the USA, I still can't help but feel that there is more than a hint of an "all out war on Russia" in these new downward pressures on oil.
Saudi does indeed, as I said before, have a huge interest in killing off American marginal producers. But if they can kill Iran and Russia with the same stone, then that is just a big bonus.
To do this, Saudi must have US approval. They would never challange the US if we seriously questioned how and why they have spalshed prices and put production at the highest level. The west seems hell bent on ending Russia as a political entity in the coming couple years. Saudi is just one part of the death by many cuts attack. Russia is a low cost producer, having large conventional oil fields in production. No fracking for them! So Saudi will have to really take oil down to rock bottom to shake out Russia. By then the USA will have lost a million jobs, most well paying. Hell of a price for us Americans to pay so the 1% can win their war against Russia.
Weekly Standard article from Bill Kristol, Neo Con extraordinaire, March, 2014:
"The Russian invasion into Crimea, Tett emphasized, had set off alarms for Europeans as they realized their dependence on Russia for energy. She said it served as a reminder, "They need to get a lot less dependent on Russia."
The invasion was also important, Kristol maintained, given the fact the Ukraine voluntarily gave up its nuclear weapons in an agreement with Russia, the United Kingdom, and the United States in 1994 called the Budapest Memorandum. He said a part of the agreement was that "Ukraine's territorial integrity and sovereignty would be respected by Russia."
"If it now turns out that a nuclear-armed neighbor can just invade a country with whom they made this deal, with impunity, what signal does it send everywhere around the world?" Kristol asked. "The signal it sends is, not only don't give up your nuclear weapons, build nuclear weapons. That will guarantee your safety. Everything else is just talk."
Goldberg agreed, and said Middle East countries could decide to take up nuclear arms in the face of the events in the Ukraine.
"If you are sitting in Saudi Arabia right now or the United Arab Emirates, you would see Russia marching into Crimea, and saying, 'Well, I think we might need the ultimate deterrent as well,'" Goldberg said.
ahh, yes, still at it with the labels, you're a sneaky one, you are...LOL
Would you prefer "fascist" to "neo con?" Fascism is not a political ideology. It is merely people who already control capital desiring to rule the world. For example, Cheney is a man who ran Halliburton. Halliburton made Cheney quite wealthy, largely by virtue of taxpayer dollars. He infiltrated government, and caused the government to invade a few countries, leading to massive profit for himself and his friends, and an entrenchment of control for the same group. He is a fascist and a neocon who rallies his followers against "socialsim," because of course socialism uses other people's money. He also rallies his followers against libertarianism, because libertarians are "isolationists" who don't understand all of the threats from outside the country. He is against every political flavor that doesn't involve the wealthy getting wealthier from war profiteering and enslavement of the sheep. If you see the term neocon or fascist to describe him as merely a "label," then I'd like to hear why.
Rand, lookit, all I am saying is putting labels on people is passe, it is getting old. When you point a finger at someone, three are pointing back at ya.
I propose we drop the crap labels, stop blaming eveyone else, when we are all party to this crap and get our minds together to fix the SHIT...is that so FUCKING hard to do. DAMMIT I am sick of the in-fighting...while the true devils hide behind ivory walls raping us all!!!!
I'm sorry Rand, you will never get what I am saying I guess. Fascism is an ideology, a demented socialist Ergo NAZIsm, for which Cheney is neither. NAZI fascism is the LEFT of the spectrun, just to the right of Communism, and is defined by state and corporations joint ownership, Communism is state ownership of everything. Did he get rich making weapons, yes. He is a Capitalist, and made lots of money. He quit the company to work in govt, yep. You conveniently focus against one side, is my point.
Wilson got us in WW1, FDR WWII, JFK got us in Vietnam, LBJ escalated it, Nixon got us out (by social dissent). Clinton got us in Yugoslavia. We got hit on 9/11, so Bush took us to war, Obama continued them. He got us out of Iraq, and now look at the place (ISIS). We have not have good leadership in a long, long time.
Do I agree with making weapons, yes. They can be used defensively or offensively. I prefer to have them for defense, not offence.
Who is in charge now, a neoliberal, and he bombs the fuck out of people too.
I just want us all to try to come together, without pointing blame, when we are ALL to blame, for electing fools to lead us. We need to fix this thing as a Nation, come together, find common ground, without labels. It can be done, but it has to be through open minds, forget the past hurt and injustice, revenge, etc.
You really think we can fix this... by voting?!
BWAHAHAHAHAHAHA!!!
There is no hope in politics. It's rigged, dude.
unix keep typing the hole is getting deeper. i got a label for you- stupid...
hey, who said anything about voting?
new game, the only hole I dig is the one in the stubborn mind, you may think I am stupid, that is fine. I seek a way out, whereas, most folks just want to shout at each other and call them names and label them...
fine, go ahead and put me down, i got thick skin. you're just another keyboard warrior, all 98 pounds of you dripping wet LOL
But there are already three de facto nuclear powers in the ME. Israel (who has the US on speed dial), Iran (who has Russia on speed dial), and Saudi Arabia (who could have either/or/both Pakistan and China on speed dial).
The minute someone unzips their fly and Geiger counter goes off...
all good points, except you think it will take years...i say a lot sooner, and it turns hot for everyone...
The puppetmasters ARE NOT CONCERNED WITH U.S. JOBS LOST.
The puppetmasters actions DO NOT DESTROY THE RESOURCE, but they DO destroy the current OWNERS of that resource.
The puppetmasters will END UP WITH THE RESOURCE, having picked it up for pennies on the dollar from the bankrupt current owners who took on all the debt.
THIS IS NOTHING BUT WIN-WIN FOR GLOBALIST BIGGIES.
Well I was rolling down the road in some cold blue steel
Had a blues man in the back and a beautician at the wheel
Goin downtown in the middle of the night
Laughin and jokin
Feelin alright....
OT but related and funny...
Bibi and his Likud-ites are running for re-election. Jon Stewart aired this clip last night: BIBI-Sitter https://www.youtube.com/watch?v=0CzqrB7aQgs
The clip got muted laughter from his Daily Show audience. Stewart's punchline? "Well, I guess Jews aren't funny in every country"
Saudi Aramco slashes its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks
Based on my experience with the Chinese, they will probably ask for this discount to be applied retroactively to their purchases over the last two years before lifting another drop. Blood in the street smells sweet, as long as it isn't your's.
wtf? price per bbl same as the price at the pump, there are some mad scientists out there making trouble...
Read it again.
But of course they can't!!!. They are 20 years past their prime and Iran, Iraq, Russia and China know it!...
Let them spend the rest of their days with the American USD they are stuck with showing us how democratic they are just like the bitches the Anglo-American posse made them out to be! They sealed their fate when they fucked with Russia over Belsan and Volgograd!!!
Along with the Zionist Jew fucks, they are all going down the shitter together!
And deservedly so!!!
What race are you?
Your avitar might be a clue.
ds
Your mother was a Tel-Aviv Zionist Jew hooker that sucked uncircumcised Riyadh dick when she wasn't blowin donkey in the Wahhabi carnival show!
She loved that "larger than Khazar" dick so much she put it in her snatch and had "you"!!
As they say... All in the family!!!
Get back to cleaning the Zionist toilets or you'd get no scraps from the human's table tonight.
Anti-competitive tactics are of course the hallmark of cartels...monopolies. Never mind such actions are illegal under federal statute for now about 100 years, and the US Government protects said cartel going on half a century, and has just promised to up US TaxPayer spending by 40% to another by definition political monopoly named the Hasemite (sp) Kingdom of Jordan.
I'm so relieved that the US Maximum Leader yesterday at the National Day of Prayer Breakfast, finally connected organized violence with religion, "in the name of Christ." Sounds like the Tribe is working with the Mohammedans.
It was a slam against Christianity by a Muslim pretending to be a Christian so he could be elected.
With Saudi deep pockets mind you.
He forgot to mention that the Crusades occured after being attacked by Islam for about 400 years.
Things happened slower in those days.
Not saying the Crusades were very nice.
there was a time when Americans would have dragged any President making such incendiary comments into the street and hanged them and then burned down that tenement called the white house.
Whoooaaaa, back up there. So the Saudis are selling oil at $2.30 a barrel. How does that equate to the $50 a barrel price. Could someone here with far better knowledge than I explain how this works? Thanks
No, no, no...read the part referencing the $2.30 number again, and see what you see...
My bad, I'll use my eyes next time rather than not use my brain. Thanks for alerting me to my complete crapness. :)
How about lets talk about what STOCKS will be the most affected by this? Shale stock to get crushed more and some into BK
rigs baby rigs. nd , alone from -200 to 13X last check. stacking out left and right. boom to bust. i got a cute home in williston going for cheap, just for you...
this is real shit, another boom bust story courtesy of our cb'ers. i just wish people could connect the dots and vent their anger toward the bankster cartel. oh well stupid is what stupid does.
hey they are getting max allowed 515/week in nd. i could get by on that, so here we are with another pacifier call free money entitlement. now if they can somehow extend unemployment(calling repubbers) and get some votes out of this, ha...
Exsqueeze me, but can they do that? I thought the oil markets were fungible, and prices to all customers had to be equal because it would just be cheated, I mean arbitraged, otherwise. I mean yes, there are quality costs and transportation costs, but different prices at the wellhead for different customers?