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From Currency Wars To Oil Wars - OPEC Ups Production To 3 Year Highs As Iran Output Surges
As China takes the currency wars to the next level, so OPEC, not to be outdone, rotates the oil war volume to 11. As Bloomberg reports, OPEC pumped the most crude last month in more than three years as Iran restored output to the highest level since international sanctions were strengthened in 2012. The response - as one would expect - is a plunge in crude prices, erasing all the ridiculous algo-driven gains of yesterday, pushing WTI back on the verge of a $42 handle.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of world oil supplies, raised output by 100,700 barrels a day to 31.5 million last month, the group said in its monthly market report, citing external sources. This increase came even as Saudi Arabia, which often curbs output toward the end of peak summer demand, told OPEC it cut production by the most in almost a year.
Iran may further expand output after reaching an accord with world powers on July 14 that will ease sanctions on oil exports later this year in return for curbs on its nuclear activity.
“Iran has been rising slowly but surely for a while now,” Abhishek Deshpande, an analyst at Natixis SA in London, said by e-mail. “It doesn’t need foreign investment to revamp existing infrastructure and prepare fields, resulting in the small increases you can see now. But the bulk of the increase is expected once it becomes clear sanctions will definitely be lifted.”
Iran increased output by 32,300 barrels a day in July to 2.86 million a day, the highest since June 2012, according to data OPEC compiles from “secondary sources” such as media agencies and international institutions. Sanctions to deter the nation’s nuclear research took effect in July that year.
The reaction - for once - makes sense...
WTI is on the verge of a $42 handle
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Bloody hell, it's all kicking-off today...
Going to........................
$35
Try 20s.....35 is bullish!
$38 was the 2008 low
It'll go as low as it needs to to get Russia to fall.
Money flows across the globe have slowed to a crawl, we'll definitely be blowing through that high $30's target once the real data starts rolling in on how bad it actually is. It's all fun and games for US to do it's best to keep playing the old chess game with Russia but watch out if USD hegimony starts going south.
$20's for sure, especially since Cramer had the CLB CEO on a few weeks ago and he called a "bottom" when it was $5 higher.
@Deathrips
never said it would stop at $35 LOL
And the price at the pumps on the local indian reservation today is...
$3.49 regular unleaded.
Oh California, why dost thou fuck me so?
same price in alaska..
3.49
XAU XAG.
Touche..
I have puts bought from 57-60 strike 45.:)
Im like jesus, but im real...i turn fictionals fraud into physical silver.
RIPS
Just a rest stop on the highway to hell......
Get cash on hand, this could be the week/month.
I had the same thought...
Refineries haven't even shut down to change to winter blend yet. That will happen in late August thru September. You'll see a real surge in oil inventories then.
OPEC DON'T GIVE A FUCK
Ask your self
What does it cost saudi to get it out the ground?
Not alot my guess
hear breakevn is around $15
I've heard that too, from an retired American that worked the oil fields in the Kingdom, As low as $4 (1995 $).
This claims $3 for SA...$15 for Iran...."marginal cost".
http://knoema.com/vyronoe/cost-of-oil-production-by-country
Less than it costs Iran.
Charts are all out of date but still indicative, if anything, it's much worse for Iran now, because it has needed but has not received hundreds of billions of dollars in investments to maintain let alone grow its production.
https://marketrealist.imgix.net/uploads/2015/01/breakeven-cost1.png?w=66...
http://crudeoilpeak.info/wp-content/uploads/2012/10/Fiscal_break_even_oi...
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012...
Seems almost time for the banksters to once again pull the rug out and demand they get bailed out amid threats of tanks in streets. I'll gladly take my chances with the tanks, thank you.
do you see what happens larry?
That rug really tied the room together, did it not.
RIPS
... Also, Dude, chinaman is not the preferred nomenclature. Asian-American, please.
another goodman quote (raising arizona):
And, as per usual, l wouldn't be surprised if the source of the cartel friction weren't financial...
This may be appropriate. I wish they still made good movies...
Iran increased production by 32,300 barrels a day in July. That's 0.03% of world production. Sure to crash oil prices by 5%.
Must be the new Math.
"OPEC Ups Production To 3 Year Highs As Iran Output Surges
Iran increased production by 32,300 barrels a day in July. That's 0.03% of world production. Sure to crash oil prices by 5%.
Must be the new Math."
Bingo. This is nothing more than a leverage unwind. Commodities (just like the last crash) are leading the way.
Caliphate Interest Group meets psycho Banksters in control of USA & EU...
Outcome: Collapse, equal chance for Caliphate to be realized and for Banksters to own Europe & North America.
Bit Players: People of ME, NATO, US Congress, US President, People of Europe & North AMerica
I feel sorry for all the folks who hold something they think is worth something but it isn't worth anything
I don't, screw that shit. I tried to tell them five years ago and they all laughed at me.
My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel.
- Rashid bin Saeed Al Maktoum
Ready for $20 oil? Shiller thinks so.
If oil is $42 and change why am I still paying $2.67 at the cheapest place in my town in Fairfield Cnty? Shouldn't it be closer to $2.00?
This is exactly why Saudi Arabia is looking at going more into the refining business as well........crude price per barrel went down but refineries are still killing consumers at the pumps.
Taxes are killing at the pump(60% in Germany)
The geopolitical fight now begins in earnest.
The reserve currency is based on petrodollar link. Iran now enters the stage as member of the opposing axis of China led Russia/Iran petroalliance all the time it participates with Saud in Opec...
This production rise now attacks the petrodollar by encircling Saud in a pincer movement of joint control of falling priced production and military defiance.
USA abandons military support of Sunni anti-rabid axis (Erdogan now heads it at USA's behest BUT has corrupted its local presence by TRYING to hit the KUrds at the same time as it fights rogue Sunni ISIS splinter), thus enfeebling its links to Saud oligarchy.
It remains to be seen if Erdogan's Turkey has not bitten off more than it can chew in its regional play to resuscitate Ottoman domination as iconic past hegemon of Sunni Islam. This move could dissolve the internal political cohesion of Turkey as nation !
Iran has to establish its Oil presence at the same time its Safavid legacy of cultural beacon. This could be at the expense of Saud preeminence. ANd Saud could renege on the petrodollar if the Chindia market becomes more important to it than US's military protection, which is visibly regressing on ground and is more Drone controlled; aka something that will reek havoc among the civilian population if it is hotted up; something that Saud will be blamed for if it supports it openly. The Sunni reaction in all arab lands could increase its very anti-Saud monarchy trend.
Saud's role if it is politically eclipsed in ME by IRan and Turkey will make the petromonarchies fall into the boiling kettle where lie Assad and Lebanon today.
America's friends pay a heavy price for being part of the Bush neo-con alliance. Its a Sicilian kiss.
But WS America is on a roll and feels like Buffet this wealth bean stalk will never shrivel !
Some awesome fight between financialized USA and Oil's real hold on world trade is now coming to the boil.
Can the wheels come off on the super buggy linking Reserve hegemony to king commodity?
Lets see how China manages its own financialized reset via more currency manipulation.
falak, as much as I enjoy your artistic wortgedrechsel, sometimes more is less and you should say it straight( so I can understand it better because I think you have something to say contrary to most others here)
Nonetheless I enjoy it.
Complex moving world, we're in the movie "modern times".
We are heading towards the Great Dictator!
Is that simple enuff?
BTW Charlie was a genius!
But that is not new(the message and charlies genius)
History rhymes.
Euro capitalism died in 1930s. Euro fascism followed. Charlie was there for us all.
American capitalism looks like hitting the same wall. We look like we head to a more totalitarian world as old Empires hate to die and only reform after the storm.
New is just the clothing until the emperor is naked. Then we see naked truth which is as old as the sphinx.
As the man said : the camel is old the mercedes is new until the wheel comes a full circle.
Our only hope is Google's search and see what artificial intelligence cooks for us in new alphabet soup.
Politics and Knowledge tree seldom agree. Thats why we progress. through crises. Alas not through perpetual peace; Kantian dream !
I think what he mant to say is that the US is trying to double penetrate a hyena.
Good news, I need to buy a new car, looking for something fast and good looking, with around 20 cylinders gets 1 or two barrels per mile.
Northern Pike plus 100 for your screen handle ! Best sport fish in North America in my two cents worth !!
TY Deer Hunter I was thinking more on the lines of a long sharp stick than a fish when creating the handle but I agree from experience that a good sized Pike is fun to reel in and makes a great dinner if you know how to filet them, they do quite well pickled too and with that method you dont have to worry about the bones. For that matter I do quite well pickled too but it is too early yet for that yet.
Cheers!
Hallelujah! Pent-up Iranian production will save the world from Peak Oil! For roughly one week!
Now Iran can sell us all those millions of barrels at historically low prices dangerously close to its breakeven at margins that do not permit even a fraction of the desperately needed reinvesment to maintain and modernize let alone expand Iran's energy sector.
Production increases this pathetic cannot even keep pace with demand growth just from population growth alone at current per capita consumption rates. But facts don't matter.
One fact that matters, which you left out, is that the "marginal cost" of producing a barrel of oil in Iran is around $15. I see numbers all over the place claiming Iran needs $135 and SA needs $90+ etc etc...BS. That's to maintain "their current budgets". Budgets built on artificially high oil prices...yes. But just because you create a stupid ass budget doesn't mean someone else is willing to fund it. And, of course, the cost of a gallon in the US isn't really $2.10 (at the station by my house this morning)...it's got to include the cost of our military and other subisidies that allow for the barrel to get here. We pay for the extra costs in "Our budget". And if we run out...or prices rise naturally (or at least more so)...then it become feasable to start finding more energy sources to replace oil. It is what it is. I'm tired of creating debt to do "innovation" that is supposed to be for our "children's future". You mean the "children" who will have to pay back the debt? Those kids?
up-vote for your ZH name. excellent. :-)
Houston...we have an American shale oil production problem...other countries keep expanding and selling oil at a lower price...Houston...are you there?..what ...you are referring me to the white house..oh..I understand..Mr. Obama wants to keep American energy workers on the job..what job would that be?... ..why of course as a bartender..