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Kuwait "Over-Supply" Concerns Send WTI Tumbling Back To $42 Handle
Reversing all of yesterday's FOMC-inspired idiocy, WTI has plunged back to reality this morning. Following comments by Kuwait's comments that OPEC had no choice but to keep production steady, refocusing the market on global oversupply, April WTI is back down to a $42 handle.
All of yesterday's idiocy unwound...
Kuwait's oil minister said on Thursday he was concerned by the 50 percent drop in oil prices since June because of its impact on the Gulf Arab state's budget, but said OPEC had no choice but to keep output steady.
"We don’t want to lose our share in the market," Ali al-Omair told reporters.
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No pimps protecting the whore. They wanna her to die...that is what this is telling me.
The ME can dry up and disappear for all I care....Fuck all of them!
Anyone else think this whole "defending our market share" argument is the worst cover story in the history of the world?
OK, so they cut back production and lose some market share, which is what cutting production does. But if they crank it back up later and start producing full-bore again..... what?..... nobody wants their oil any more? "Sorry, we only buy US oil or Russian oil now." It's a damned global commodity, nobody gives a shit where it comes from as long as they can get it when they need it.
It's not like falling behind the technology curve and having customers not want you 3 year old cell phone technology any more. It's a COMMODITY. That's the very DEFINITION of what a commodity is.
Nope, Carter signing away usury rates tops the charts, missed a homework assignment somewhere huh?
i don't think its defneding market share as much as trying to make up for lost revenue per barrel. If you are getting 50% less/barrel, people are going to try to make it up with volume(amazon, anyone?). The problem is, everyone else is doing the same thing, so it winds up as a self sustaining downward spiral. No one wants to be the first person to anounce a production cut and lose money, so they all keep pumping, further dropping the price. The same thing is happening with other commodities like iron ore. Even though the price is dropping, in many cases below the cost of production, the wells are already drilled, that capital has been expended(same with mines), so they need to keep pumping existing wells just to have cash flow, so they can keep up the illusion of solvency as long as possible, while hoping the price comes back up beofre they run out of expendable capital. They know that no one is going to extend them credit, so they will pump as much as possible. The debt fueled construction binge is slowing down, especailly in China, which is going to drop demand even further. Same with the baltic dry index
And you can't kill the shale oil production, only delay it. The oil has been there for millions of years and will be there again. When oil goes back up, and it will, then they will start pumping and drilling more.
If it was solely about market share and oversupply, all it takes is baby steps and the oversupply would disappear very quickly. Just one country has to announce a decrease in production of 2%. It would be SFA to their overall output especially since they have already taken a 50% haircut in revenue. Once one country announces a 2% cut, everyone else would follow.
Who wouldn't cut their production by 2% or even 5% if it meant a doubling in revenue.
If you had an agreement with a vendor to supply you with 100 widgets and the price of widgets went down and they said they were no longer going produce 100 widget to sell to you anymore, would you go back to them when the price of widgets went up again? Oil importers want a steady and reliable supply of oil no matter the price. Why do you think the Russians aren't cutting off gas supply to the EU right now? Yes, it's a commodity, but there are agreements between countries like Saudi Arabia, China, Japan etc. just like there are gas agreements between Russia, Germany, Ukraine etc. What you don't understand is that the entire world isn't like the US and EU. There are state owned companies in many of these energy exporting countries. Deals are made between countries or between countries and companies. Saudi Aramco is owned by the Saudi government. The same goes for most OPEC countries. PEMEX is run by the Mexican government. Petrobras is run by the Brazilian government.
Odd...I see WTI still at 45 on my quote list.
That's for May delivery. Tyler's chart is for April delivery.
I just figured that out myself.
look at delivery for USLD at NY Harbor, out to almost two years. 1.95 for jan 2017. Place your bets, gentlemen...
That's Exceptional.
It's the American Way.
Cheap Gas is Good for America.
Forget the 30s. Do I hear $29 ???????
Below 40 is real fucking pain. Below 30 is call the priest and give me my last rites pain.
This is real world shit that can not be covered up by a printer.
I hope I am wrong.
personally, I think we see 25 again before this is over. I may put a little into an ETF at that point, not before. I wouldn't advise trying to catch this falling knife. the BDI is down something like 60% over the past year, as long as that keeps dropping, I don't think oil has seen a bottom yet. This prediction does leave out the possibility of some new shitshow in the ME, though. that would be a game changer
TBone Pickens forgot to take his dementia meds this morning on CNBS and muttered that oil will be at 90 to 100 next year.......back to bed old man!
TBone is well known for relentlessly talking his own book. I've never known him NOT to.
Still, he may be right. We could be in the middle of WWIII by next year at the rate we're going.
Is that what happens in your world when you are proved wrong?
all it would take is an Iranian attempt at blocking the strait of hormuz, which they will probably do, or at least try to do, the moment the US or Isreal launches an attack
That's the threat that has been bandied around for decades. The Iranians would be the first to go bankrupt if they tried that and that is why it has never happened and never will. The US will not launch an attack while Obama is in office. The Israelis will not make a move without US backing as they have too many enemies in the world.
T Boone is 86 years old. He's forgotten more about the oil makrets than you'll ever know
On Pickens I agree: he even mentioned that Exxon might buy Enron? WTF.
Tbone you old fuck the ussa is preppin for agenda 21 and wwiii and needs cheap oil atm..
Sooner or later the soccer moms will be driving those schoolbus size gas-sucking SUV's around for summer socials. Won't that save our entire future?
Hooray! Soon all oil and distillates will be "free"...
idiots. Market manipulation? Can't be that...
'Peak Oil' - another scam
Why do you think they want to get their next Ponzi going - 'carbon credits'
There IS a sucker born every minute
The West is built on a foundation of fraud and lies today
Col Fletcher Prouty USAF. Liasion to CIA. At highest levels in the Pentagon :
https://m.youtube.com/watch?v=vdSjyvIHVLw
Indeed it makes one wonder.......
what will happen to the price of oil when the Iranian oil is unsanctioned?
Demand destruction pure and simple.
OPEC had no choice but to keep production steady, refocusing the market on global oversupply
Yes, there is so much oversupply that oil prices should fall from $110 plus in June of 2014 to $42 now. The supply has not even increased by 1% from about 93 million barrels per day. US is importing 7.3 million barrels per day as is China. Oil demand will increase at these bargain prices especially in China and India:
Mystery Behind Dropping Oil Prices Solved: Concerted Market ManipulationThe New York Times in their article, “Saudi Oil Is Seen as Lever to Pry Russian Support From Syria’s Assad,” finally admits, “Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices. “
But of course, despite this grain of truth, Saudi Arabia didn’t do this on their own, since Saudi Arabia isn’t destabilizing Syria on its own, or for its own interests. Saudi Arabia, while playing a significant part in the manipulation of global oil prices, is solely blamed for the purpose of compartmentalizing public perception. The reality is that global oil prices are being manipulated at the behest of the US not only to overthrow the government of Syria or pressure Iran, but to strike at Russia itself.
http://www.globalresearch.ca/mystery-behind-dropping-oil-prices-solved-c...
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be a good sheep and get on board with the correct meme. that being that market manipulation only occurs when prices go up. you know, all those "evil speculators" etc.
Was there so much undersupply in 2009 that oil went from $35 to $110? Do you think there was a link between QE1 starting in 2009 and QE3 ending in October 2014 and the price of oil going from $35 to $110 and back to $42?
IRAQ FEARS A WAVE OF SAUDI REFUGEES TRYING TO ESCAPE THE ABJECT POVERTY OF OIL
Mercedes mass at the border. Saudis prefer facing death in Iraq, than having to face the prospect of paying taxes for the first time in their lives.
Source: www.financialpaparazzi.com
Some perspective on yesterday's oil move via daily
http://bullandbearmash.com/chart/wti-oil-daily-closes-5-falling-demand-r...
Central bankers can bid these markets but they are not likely to hold for long.
Vlad could go for the nuclear option tonight (a self-inflicted gunshot wound), so don't let your guard down on his suicide watch.
If he wants to judo flip you or put you in a head-lock or something, just do it. Sometimes it calms him down.
Your mother should have done the nuclear option after shitting you out
Refineries in eastern Canada are buying cheaper US oil while the US imports more expensive oil. Go figure.
It has to do with the grade of the crude. Not all crude oil is the same and refineries are only set up for certain types of crude. There's light, heavy, sweet, sour.
I've never seen a market when the longs (ME oil producers) work so hard to step on their Dicks and cut their own throats....Seriously this whole price movement in oil reeks of manipulation, treachery and conspiracy. Only thing that makes sense is these crooks are fully hedged out at around $100 a barrel and are deliberately trying to destroy the competition and mostly Russia. Collateral damage U.S. and Canadain non conventional producers.....We will all pay for this and big time in the not to distant future.
Recent photo in a Texas "boomtown".
Y'all can go back home now, thanks for all your help!
https://www.facebook.com/photo.php?fbid=10101028211692742&set=gm.4285808...
SCIENTISTS WARN THAT EVEN IF TIME STOPPED, CRUDE PRICES WOULD KEEP FALLING
Journalists writting long, boring articles desperate to find reasons for crude´s decline, miss the obvious: there´s an oil glut.
Source: www.financialpaparazzi.com
You know, it occurs to me that there is a maximum physical limit involved in this situation.
Let us assume that demand is X and worldwide storage capacity is Y. Once worldwide storage capacity of Y is completely topped off, the only oil that can be pumped is that which meets the demand variable of X, no matter what the theoretical pumping capacity is.
Output will fall unless they are just going to spray it all over the ground.
My conclusion therefore is that further trouble is coming for all oil producers. They are currently over-producing to make up for the fall in margin. But soon their oil will not find any buyers and they will have no place additional to store the excess.
Barring a worldwide cartel agreement, the price is going down even further and nations that depend on oil revenues to fund their governments are in for enormous problems.