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"Saudi Arabia Is Going For it" - Why The Saudis Just Boosted Oil Production To A Record High
Several days ago, oil spiked when headlines hit that Saudi Arabia's oil minister Ali al-Naimi said he was "optimistic" about the future of the price of oil. The spike was confusing because what Saudi Arabia also said, but got no air time, is that the current excess oil production would persist indefinitely, and assure that the scariest chart for oil bulls, namely crude oil inventories in the US ...
... would continue to be the only thing in the US economy that has achieved "escape velocity."
Actually, we take that back: Saudi did not say it would keep production flat - what it did say is that it is boosting its output even higher in what is now a clear confrontation with the US "marginal producer", namely the shale patch, which so far has survived thanks to cheap funding from naive bondholders who are willing to fund US shale on hopes that an oil rebound is imminent, and increasing consolidation in the space which will cut overhead thus bringing the breakeven cost of production lower.
As Globe and Mail reported, instead of leaving its own production flat in an attempt to stabilize oil prices and hit its "optimistic" outlook sooner rather than never, Saudi Arabia would boost production quite sharply to claw back market share. Specifically al-Naimi, revealed that the kingdom’s oil production in March was 10.3-million barrels a day – a record high. "Saudi Arabia is going for it," Olivier Jakob of the Swiss energy consultancy PetroMatrix said on Wednesday as Brent crude fell by about 1.3 per cent.
So what is Saudi Arabia's reasoning to "make up in volume what it loses in price"? Here is G&M's attept at explanation:
Why is Saudi Arabia opening the spigot? There is no doubt that country’s own domestic demand is rising, thanks to heavy investment in new refineries, requiring more production. But it also appears that Saudi Arabia is making renewed push for market share for fear that a gusher of Iranian oil will soon hit the export markets as the Iranian embargo is ratcheted back. “They will not want to abandon any market share to Iran,” Mr. Jakob said.
The problem for oil producers and investor is that the Saudis are not acting in isolation. In March, both Iraq and Libya managed to boost production in spite of the violence and chaos in those countries. As a result, OPEC production in March was about 31.5-million barrels a day, an increase of 1.2-million barrels over February and 2-million barrels over March, 2014. The March figure is well above the second-quarter estimate put out by the International Energy Agency.
At the same time, U.S. production is surging, creating burgeoning stockpiles of oil. The combination of rising U.S. production and rising Saudi production can only be bearish for oil prices. The prospect of oil testing its January low should not be ruled out, especially if Iran is given the green light to ramp up exports.
The good news for oil investors is that low prices could well trigger a repeat of the consolidation round seen in the late 1990s, which was another period of extremely low prices. In that era, the biggies – BP, Chevron and Exxon – all did monster deals that significantly boosted their global clout. The trick, of course, is to pick the right company. The premium paid on BG’s share was 50 per cent over BG’s closing prices on Tuesday.
All of which probably "explains" why oil was, until a few days ago, at the highest level seen so far in 2015.
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I call BS. The neocons, who control Saudi Arabia, (remember, Israel and Saudi Arabia, are excellent friends, dominated by the same controllers), want to punish Iran for cutting a deal with Obama. The greater Israeli project is on hold fo now, until another ME war can be started.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
Your alway here. I think this is your job. Go away, try Marketwatch, plenty of trolls there.
One way to stop petro gold is to have the Saudis offer it for nothing in paper money.
Is there a market for Saudi heavy crude?
http://www.gizmag.com/quant-e-sportlimousine-approved-europe-roads/33020/
Nanoflowcell E-Spotlimousine is putting an end to the oil age. Fuel cell powered by salt water, it has electrolites. The Saudi's know we will be filling up at the ocean soon, time to sell all that oil before they go back to weaving rugs or finding ingenious uses for date palms.
And how exactly will we be producing all that electricity? Burn coal, oil, gas, nuke?
This is BS, the exports matter, if they produce 10 MB/day but use 4 MB/day to get the other 6 MB/day in terms of net there is no record.
Record pretending everywhere.
It looks like a new type of battery. The article says electrolyte, not seawater, and the car is powered by electric motors. You are on the edge, Zirp, but the edge of what exactly?
We'll see $30 before we see $60 again I suspect.
$30 this summer and $200ish next summer.
All in a day's work.
Brawndo, The Thirst Mutulator, has electrolytes!
There's a mkt for everything at the right price.
I'm not buying it...they don't care about market share...they care about price. The barriers to entry in the Oil/Gas market are incredibly high. If they can flush producers/low margin fields under, then they will be able to raise prices...and keep them high.
If they can flush low margin fields under, then they will be able to raise prices.... and keep them high.... AND?....the low margin fields will start up again. No? Aside from cheap Fed money artificially accelerating the pace, isn't this why low margin fields were started?
Negative Rates - true enough but there is limited refining capacity.
Make appointments to blow people behind McDonald's
Talk about that fast food experience!
I prefer Tim Horton's
Not into hot dogs, regardless of the brand or the condiments.
Like oysters and shellfish. Much healthier.
You don't live in California.
If I ever get my hands on you I will give you a Carolina Reaper sauce enema.
I'm making $6k a month busting my ass creating products people want to buy adding a tremendous amount of value to the economy by keeping factory workers, distributors, dockworkers, truck drivers, warehouse people, supply chain and logistics workers, salespeople, buyers, retail workers, and managers employed.
All in all my small contribution to the economy can be valued in the billion of dollars. Isn't that awesome. If only more people actually worked in the productive economy.
Lmaoo Shooter_44 got a bit too excited about your post.
I'm paying $6k per month in alimony to a useless freeloader. Go figure...
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...https://chaturbate.com/male-cams/?join_overlay=1
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...https://chaturbate.com/male-cams/?join_overlay=1
http://uk.businessinsider.com/uk-oil-and-gas-investments-said-theres-a-1...
I read dat reddit today. Mo Supply, Mo Oil, Mo Problems?
Haha
Trade is still short oil.
Wars require energy, period.
Funny how China's storage capacity is full, too. Hmmm.
More supply...lower price....more bankruptcies...
UPDATE 1-Canadian oil company to liquidate due to crisis in YemenThe report showed a steep decline in hiring last month — the slowest pace in more than a year. The Labor Department report surprised analysts, who were expecting about 245,000 new jobs.
http://www.bizjournals.com/houston/news/2015/04/09/even-for-texas-jobs-r...
Redbox to close nearly half of Chicago headquartersNow, the company says it’s getting ready to shed 92,000 square feet of office space at Redbox's headquarters inside an Oakbrook Terrace office building. The company will be out by July 2016, according to an SEC filing.
Redbox leases a total of 211,000 square feet there. That means the business is getting ready to shed more than 40 percent of its headquarters space, which industry standard estimates say is enough room for about 600 employees.
http://www.bizjournals.com/chicago/news/2015/04/08/redbox-to-close-nearl...
Some men just want to watch the world burn.....
Way to go, Barry !
Nice job protecting U.S. positions.
On the other hand, there is the benefit of burning everyone elses oil before our own.....
Simple math. Saudis want to sell as much as possible at $50/barrel before it's selling for $10/barrel... who wouldn't ???
$10 per barrel? LOL!!! Yeah, and $120 gold too. Good luck actually taking delivery.
I would have outright laughed at the thought of $50 or lower oil at this point last year, so, at this point in Bizarro /Twilight Zone /Event Horizon / Onionesque world, why not?
Simple economics, at that price, people/corporations would be filling fucking swiming pools, why the fuck not? Remember, America still uses more than it produces....
http://ir.eia.gov/wpsr/wpsrsummary.pdf
It's actually possible, with a solid gold standard and 30 yr warrenties on just about everything, one could drive the price down with flat tax of say 25% at the register. People wouldn't gamble their money away so fast and the supply and demand effect could control price, with the help of the sun and some yeast of course.
Yes, but the flux of energy matters. A tremendous amout of flux (easily gained by burning calorie-dense fossil fuels) is required in order to simply maintain the status quo...
We are in fact burning the energy that has been stored after several hundred million years worth of "sun".
Naturally, but the earths problem is not running out of domestic energy, but running out of natural sunshine. Nothing can be moved any closer to the sun than mercury, after that, you are in search of another sun to bring your sun and water to work the magic all over again, in the process moving ever further away from your original location and hence your zens destiny. Only you can prevent forest fires, the rest is simply, and strictly, mechanical.
Some investment strategy. Never put it past some ZH goldtard to admit he is willing to pollute his own backyard to "invest" in an arbitrary relic like oil. All gasoline engines are being phased out for the new hydrogen technologies. All you need is saltwater to run the http://www.gizmag.com/quant-e-sportlimousine-approved-europe-roads/33020... this baby is here now. Adapt to the new technology.
The Saudi's are smart enough to know time is short to sell as much as they can.
So, another moron that does not understand that is takes energy to produce the hydrogen in the first place. Hydrogen is a good place to store energy but it is not a source.
Personally I like what these guys are doing because it allows the existing distribution and combustion systems to be used.
http://greenchemicalsblog.com/2014/01/22/reg-enters-industrial-biotech-w...
I would argue it is too volatile to store long term too. Short term..maybe.
Total bullsh!t. This car uses highly metallic brines, not "salt water" and while technically correct to call it that, it's deceptive at best. The tech has been around since the 1970's. No new Magic here.
Total bullsh!t. This car uses highly metallic brines, not "salt water" and while technically correct to call it that, it's deceptive at best. The tech has been around since the 1970's. No new Magic here.
One barrel is approx. 1590 kWh energy content.
Assuming functioning capitalism there would be competition between the mechanical kWh that comes from oil and the kWh that comes from other sources like coal.
Do some calculations.
How much of the energy of the oil bbl do you get on the road (efficiency of motors of fossile cars) and what would this energy alternitively cost for example from sinking hard coal prices, from excess wind or solar electricity that could be stored in your e-car.
You are ignoring several important points;
1) how many kWh of energy is required to extract that barrel. The message being, just wait, we will stop using oil with a lot still in the fucking ground.
2) how many kWh of energy will be require to build this alternative grid?
3) What sort of energy flux will have to maintained in order to actually get enough useful work done in order to simply maintain the current standard of living. Fossil fuels have tremendous energy density, you can do a lot of work quickly (high energy flux) by burning them.
There are solutions, but only if capital and resources are invested wisely. Now you tell me, has the world been doing that?
There is no solar electricity, the bbl has to be refined, a rather large initial cost, plus continuing cost of extraction of usuable fuels, a cold fusion reactor will only use the amt of resources needed to provide the energy required, a far superior method of extracting energy.
So pump prices are going higher?
Exactly. Makes sense, right?
Oil as a weapon against Russia for Zion's desire of Lebensraum in Syria.
And to think that some still think that the Saudi rulers are really Muslims.
The banksters need to repay us.
Trix may be for kids, but tricks are for Zion.
but but but, peak oil?
Oh wait, it was changed, peak cheap oilil??
Oh wait again, now they are calling it peak cheap wti oil???
peak oil guys are just like the global warming fucktards. I am ashamed that I bought into the "peak cheap oil" bullshit
Still, the question remains why the rest of the world (x-US/Canada) only increased production 4% from '05 til '15 and did not take advantage of the 300%+ higher prices with higher production? Only region to significantly take advantage of the higher prices with higher production was the US/Canada, which increased by 60%+ (though noteworthy is that Russia's increase represented the rest of the global production increase)???
And now price has fallen 60%+ and producers want to ramp production? Peak collusion? Peak production? Peak stupidity? If shale made sense, why would corporations not transfer the technology to other regions to ramp production...they have had a decade to do so??? Seems anybody that had excess oil would ramped production and sold it at record high prices rather than dumping it on the market at lows??? Lot's of questions...no real good answers. ONLY TAKEAWAY - (SHOCKER) IF EXCESS PRODUCTION WAS WITHHELD AT HIGHS & PRODUCTION RAMPED AT LOWS...THAT ISN'T EXACTLY THE ACTION OF A CLASSIC SUPPLY/DEMAND DRIVEN "MARKET"!?!
http://econimica.blogspot.com/2015/04/why-would-corporations-nations-leave.html
excellent points. i suspect our banker overlords might be trying to kill us all
Here's a video that explains PEAK oil. The key is PEAK Once you get that, you can understand what PEAK oil means.
https://www.youtube.com/watch?v=fKgO4lmC-eE
Some folks revel in NOT understanding.
And crude oil imports still avg 7.6 MILLION BARRELS per day... story you never read.
http://ir.eia.gov/wpsr/wpsrsummary.pdf
Get that mkt. share rag heads. I want 99 cent gas.
'Cause it ain't 'murica until every soccer mom is driving a F-450 dually.
It's time to get the Iranians to go to war with the Saudi's
He doesn't think fracking is ecologically sound. He's trying to prevent California from falling into the ocean, causing a human extinction event. Good.
Embargo ON! Oh wait, I mean embargo OFF! Aw fuck it....who run ClownTown? OBozo.
From Wayne Madsen report
December 17-18, 2014 -- The CIA-engineered oil glut to bring down Putin and Maduro
John Brennan's long familiarity with Saudi Arabia, owing to the time he spent there as the CIA station chief in Riyadh in the 1990s and his knowledge of Saudi oil operations, has paid off. WMR has learned that Brennan's agents inside Saudi Aramco convinced the firm's management and the Saudi Oil Ministry to begin fracking operations to stimulate production in Saudi Arabia's oldest oil fields. By pumping salt water into older wells, some at a depth of 3 to 6 thousand feet, an inordinate amount of pressure was built up. The CIA's oil industry implants knew what would occur when the fracking operations began. Due to the dangerously high water pressure, the Saudis were forced continuously pump oil until the pressure became equalized. That process is continuing. If the Saudis ceased pumping oil, they would permanently lose the wells to salt water contamination. In the current "pump it or lose it" situation, the Saudis are forced to pump at a rate that may take up to 5 years before they can slow down production rates.
The net result of the CIA-inspired fracking operations, which the Saudis were warned not to pursue by petroleum engineers working for some foreign-based firms like Schlumberger, is that there will be an oil supply glut for the next 5 years. The glut will be followed by a reduction in Saudi oil production unless new oil fields are brought on line. There is now a major push by U.S. and Canadian oil companies to bring the Keystone XL pipeline from Canada to the United States to offset the expected sharp rise in oil prices in five years.
The CIA operation to frack Middle Eastern oil fields was not only limited to Saudi Arabia. WMR has learned from oil industry sources that similar fracking caused over production problems in Kuwait and Iraq.
The Saudis have been water-flooding their big fields for a long time now. They have also been seeing water breakthrough for a long time. You just have to squeeze the perfs and start producing higher and higher up the wellbore as that happens. I'm unaware of any large-scale fracing going on in KSA as their reservoirs are largely conventional water-drive systems, iirc. This report sounds like a bunch of hooey to me, but I'm not in KSA nor do I work that area of the world.
the combination of rising U.S. production and rising Saudi production can only be bearish for oil prices.
That would be true if US production was still rising. That stopped in January, but hey quote some alcho from the Globe & Mail because he'd sure know.
The Saudis will make sure US production does not rise. I love it, fuck fracking.
It means that oil prices will drop, so will RUB will drop again an only thing will rise be putin regime budget deficit and inflation in russia. It means little hitler pytin will be ddesperate to start WW3 in order to create huge outside enemy and war as explanation to why russians gets poorer every day.
http://stopputinregime.wordpress.com
Anyone see this story??? 100 billion barrels of oil have been found in England....
http://www.fromthetrenchesworldreport.com/100-billion-barrels-of-oil-hav...
3-15 billion recoverable or somewhere around 30-160 days of world consumption.
In other news over 50 BILLION POUND GOLD discovery found. It's in the Oceans, but I am sure that's just a minor detail.
"If you first don't succeed, use a bigger hammer" seems to apply here.
As I've said* before, the Saudis are looking to not only harm financially their competitors that they cannot attack or buy (Russia and Iran), but to attack the only super-competitor that they CAN buy: US Shale Oil frackers. At 10 cents on the dollar, when they're bankrupt, and using their own bank: Citi.
* http://www.zerohedge.com/news/2015-03-19/how-many-shale-oil-plays-make-m...
Thu, 03/19/2015 - 13:05 | 5906528 Kirk2NCC1701
"How Many Shale Oil Plays Make Money At $37 Per Barrel? (Spoiler Alert: None)"
Ah, but the Big Fish still get to eat the Little Fish (via bankruptcy fire sales) -- thanks to the Fed and its QE: "Money for nothing, and checks for free!"
Sing along now... "Money for nothing... easy, easy money..."
p.s. Note that Big Fish control Big Gov. Little Fish do not. Place your bets accordingly.
Thu, 03/19/2015 - 13:16 | 5906528 Kirk2NCC1701
"How Many Shale Oil Plays Make Money At $37 Per Barrel? (Spoiler Alert: None)"
Ah, but the Big Fish still get to eat the Little Fish (via bankruptcy fire sales) -- thanks to the Fed and its QE: "Money for nothing, and checks for free!"
Sing along now... "Money for nothing... easy, easy money..."
Note that Big Fish control Big Gov. Little Fish do not. Place your bets accordingly.
p.s. "Ditto" for AU and AG mines: "Con-so-li-da-tion", i.e. hostile takeovers and bankruptcy sales. Sold to domestic and foreign predators.
The shale oil bust is going to make 2008 look like a fucking party. I try to talk to people about this and they look at me like a deer in the headlights. It should only take about a 20% default for that whole junk bond market along with all of its derivatives to come crashing down. This is going to be so ugly it is keeping me up at night.
The Quant nanoflowcell looks like it might be Vanadium oxide, with a nanoparticle ion exhange membrane. The membrane will have quite a bit of surface area for ion exchange.
Transporation sector then petrochemicals are Oil markets. If transportation finds another portable fuel source with enough energy density, then it could be used.
However, hydrogen has to be formed usually with electrolysis, and this particular "salt water" electrolyte will need ion formation in the same way.
The cyclone engine is also interesting, it is supercritical steam engine and can burn any fuel. It can burn Coal Dust, of which there are many hundreds of years worth on hand. Also, biofuels, especially ethanol made from hardwoods can be done as soon as superbugs can be created to form a bio reactor. In Texas alone enough mesquite could be grown to fuel much of the country with ethanol.
Equation is well to wheel, and usually the energy conversions make inefficiencies which kill off alternate fuels. For example, nuclear fuel to steam is one conversion, then to electricity is another conversion, then to electrolysis to form hydrogen is another conversion. At the fuel cell in a car, there is another conversion - usally across a platinum membrane. Expensive and lossy, so pumping fuel out of the ground will continue to make economic sense, unless the economics shift.
Why? They're broke, just like everyone else.
Mom/Pop and speculators all banking on oil rebounding will be burned in the coming weeks.!
Oil exports account for some 50-75% of these countries GDP....Big oil will snuff out alternative energy projects. The Fracking race to the bottom is here! $1.00/gal gas is on its way to a gas station near you. And nobody will see it coming.
The peak oil argument is starting to look less demanding.