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Saudi Arabia Just Cut Crude Selling Prices To The US, Europe And Asia
WTI Crude oil prices are in total panic buying mode this morning as the algos are fully in charge once again. WTI is up 5% this morning in a straight line since US equity markets opened (and USO went vertical). What is most ironic is that Saudi Aramco just slashed prices for crude oil to everyone around the world.
Totally human...
Here's why Oil ramped... as equity momo algos switch to crude to spark the buying...
But Saudi just slashed prices...
As Bloomberg reports,
Saudi Arabia, the world’s largest crude exporter, cut pricing for all October oil sales to the U.S. and Northwest Europe and reduced the premium on its main Light grade to Asia by 30 cents a barrel.
State-owned Saudi Arabian Oil Co. cut its official selling price for October sales to Asia of Arab Light crude to 10 cents a barrel more than the regional benchmark, the company said in an e-mailed statement. The discount for Medium grade crude for buyers in Asia widened 50 cents to $1.30 a barrel less than the benchmark.
Charts: Bloomberg
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Perfectly normal.
"Saudi Arabia" and "crude" are words that go well together.
If Saudia Arabia was smart, instead of crude... instead of dumping large volumes of physical oil for bottom dollar, they would be gaming the paper oil market in the first out month to ensure that on expiration day some dumb schmuck is forced to take delivery, or sell that oil at $5/bbl.
Trading paper for physical gold would be pretty smart about now.
Oil prices down.
Beheadings up.
Bullish!
Jah jah, like 6 sigma, the noo normal... A key perceptual shift, internally, is to realize that the 0 point of our normal distributions are sitting in LaLa land....
Our assumptions are worn and tattered...
And last but not least, it is a great time to be aware...and watch in real time, the death of the age of oil...which is precisely what this is....
https://www.youtube.com/watch?v=FjmWeypvoQg
How the West sees an “ideal” Russia?
http://thesaker.is/ukraine-sitrep-september-2nd-2015-by-scott/
Hey Zoltan check ur inbox! I wish to speak.
um.. OK so when does WW3 start??? Anyone want to guess?
If I was a betting man, I'd say oil has bottomed. The sentiment was so bad, you couldn't find an oil bull to save your life. And we're pennies away from 5 waves up from the dead lows.
I agree the bottom is near when the oil bears describe a very modest decrease in SA selling prices as a "slash." As when Tyler states "Saudi Aramco just slashed prices for crude oil to everyone around the world." Someone seems desperate to set the tone as total despair in the oil markets. Meanwhile in the real world the latest EIA data indicated seasonally adjusted domestic crude demand swung to a gain of .1% mom, and yoy demand continued to plod along with a respectable 2.6% growth in Q2. Raw unadjusted numbers have US oil consumption in June growing by 3.7%, yoy, which is equivalent to 700 kb/d. Gasoline demand growth (+4%, yoy) drove more than half of that volume gain. Just the market response one would expect to falling retail prices for the consumer. But ZH readers will probably search hard to find that type of info on this site. Bertter to selectively report information that supports the world view advocated here.
Cash flow issues ? Worldwide demand for oil is going down as the global economy is going down. Yet, Achmed needs a new pair of shoes and also the cash flow to pay the citizens off and keep unrest down.
If that's the case, should be looking at how their "war on terror" is going.
Also, has there been or will there be a spike in beheadings ? Curious to see.
The world is in a depression and the borders around the world are collapsing, crushing any hope for future recovery. Bullish.
Awesome!! Soon oil will be free!!!
(I wonder why deisel prices don't seem to be reflecting the change in "market" prices...)
Soon you will be paying the tax only at the pump.
Soon they wll be giving it for free and throwing in a blowjob too.
That's what happens when you are America's bitch
That's an image I didn't need.... :-)
That's all part of the great plan hatched by the Nobel Prize Winner and the Saudi whores play a big role in it:
Think about how the Obama administration sees the state of the world. It wants Tehran to come to heel over its nuclear programme. It wants Vladimir Putin to back off in eastern Ukraine. But after recent experiences in Iraq and Afghanistan, the White House has no desire to put American boots on the ground. Instead, with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.
John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.
http://www.theguardian.com/business/economics-blog/2014/nov/09/us-iran-r...
One FREE kilo of raw camel meat (the hump) with each 10 barrels.
Looks like the Algos are in MOAR QE mode!
Oil...it is a 'new' store of value. Once its above ground Oil can be used as a currency, and since the economy is flat or going down, the Oil will not be used up.
Oil the new currency...when fiat fails, Bartertown ?
a new set of demanders since sheep is out of stawks.
Oil...its the new Gold and Silver ?
Love your icon.
Gartman bought 20,000 Dec puts on OIL at the open?
Someone on here once said "It only costs $5 bucks to get it out of the ground". Maybe not referring to oil, but arent' they all the same?
/s
This was supposed to happen to gold too where the price could not be determined in USD so it went up, and I suppose down, by 100 dollars a day. I'm leaning a little bit to buying an ounce because this shit is too hard to figure out. And I can't store oil in my swimming pool.
seriously doubt my car's gas tank will feel this effect.
If they cut the price of oil....shouldnt oil be down? Am i missing something?
Signed,
Dazed and Confused.
-Degree in Econ 101
Modern economics for the stock market is something like this:
Red, or Black?
Hit me, or Hold?
Straight, or Flush?
Pick six numbers, or more?
Looks like the ticing on all the commodities...gold and silver popped and then back down....now its oils turn....just computers playing...
When 'puters lose fiat faith...they explore the commodities.
Since none buying bonds (expecting future rate rises) then commodities may be the only play today.
If the fed puts off raising rates now...then rates will go up sometime in the future (guaranteed), so the bonds are risky.
We may be entering a barter/commodity based economy vs. fiat/finance. Its been a long time coming.
As fiat faith collapses more investment will go to all land & tangibles...new economy ?
You know artificial intelligence is only as good as the "Artificialales" behind it.
Would someone with knowledge please explain why Saudi Arabia is charging different prices for the same products to the US and Europe and Asia IF indeed ALL of these sales are paid for in US Dollars.
Thank you.
A hedge on currency volatility and they are pissed at the US, since Obama supports our common enemy Iran...this is a continual pattern with Obama (i.e. Egypt, Libya, Syria (good) & Iran & Cuba (bad)), which means it is intentional, which means you need to ask why? The answer is he will use this and the financial crisis he, in coercion with the Central Planners, are creating with huge debt and a very big false flag event that will dwarf Katrina & 9/11 combined; it is coming and will happen BEFORE the Presidential election...your new Muslim-loving King.
"is charging"
The price is set in the sales contract not the announcement. The competition differs in each of the regions; Russia wants more of Asia and Europe, so does the US. This is an analysis the Saudi's have undertaken and decided to try flexing supply side diplomacy as world energy markets respond to increasing supply. Russia and Venezuela are getting hit big time. All of the sales as you note are (eventually) valued in dollars- this IMHO is to preserve the financialized portion of the deal and pay the commissions. Talking about actual payment is never discussed in public.
Much more volatility to come.
Energy is free, all the crap around it is costly.
Enemies and allies. Make friends with those stronger then you and crush all those who are weaker.
The Despots of Saudi Arabia are not anyones friends. They are faceing production compitition in these areas so they are trying to lower the price in these same areas bellow costs, forcing that compitition out of business.
If you can be the first buyer and ramp it, then the first seller and crash it, you make money every day.
Who's along for the ride? The tax mules with 401K/IRA's, Pensions, and any "savers" still left.
looking Good Lewis
Feeling Good Billy Ray
If I were their competitors in the zones they are targeting I'd shut down my own wells, buy the Saudi oil and deliver it to my customers
They dont want it that far bellow costs. Just enough so those competitors cant make a return on their investment.
Is the word "slashed" really the right word for a 50 to 70 cent price reduction??!
In context slashed is correct. They were already discounting by X amount, now by Y anount. The % change in the discount is quite large.
Maybe the Saudis need cash to buy new tanks. The Yemeni's are taking out their M1 Abrams and M2 Bradleys like popcorn. Some idiots on liveleaks and other places claim these are export versions of the m1 and not very good compared to USA versions.
The Saudis must be pissed because the M1 and M2 are junk with no proptection.
Seeing how they are easily taken out by 1970s Russian anti-tank weapons then the Crown-Krinsky General Dynamics M1's are total shit.
They are friends of Obola, LBJ, McCain and many more NeoCons and NeoLibs.
http://www.abeldanger.net/2014/04/crown-crime-family-of-chicago.html
Tactics are more important then then equipment.
+1 for that, but Fred has a point, M1's are being taken out in Yemen by the 9K111 Fagot guided missiles. These were first introduced in 1970.
Tactics are important until you get shot.
maybe in the new Oil based economy the offshore tankers will be the new floating 'banks'.
Since there is so much unused shipping these days the empty ships can be filled with crude barrels ?
Oil is the new petro-dollar once fiat collapses ?
Given that chinese Yuan is going through issues...maybe Oil is their new currency, so the emerging markets are buying Oil as a store of wealth ?
New Oil demand (all of a sudden).
Could also this be anticipation of future trade barriers/walls setup if/when collapses/wars occur ? Anticipation buying knowing the wells will shut down soon or Oil will stop moving ?
Cash flow - when your desperate for cash you sell below market.
they probably need some cash to buy moar US equities
If they do not want to sell at the spot market, they need to have a price list. It has to be adjusted sometimes. They are bound by the market anyway. Nothing to see here, move on.
Saudi : keeping the Iranians out. Keeping the Shale whale grounded.
Or at least a passable simulation, for fooling fools.
Do you think 'Turkmenistan' & 'Kazakhstan' matter[?] :: 'Former Soviet satellite appendeges' with arteries-of-the-h?e?[a]rt' being severed[!],... wont spill the blood of Uzbekistani's and Tajikistani's down upon AfPak?!?
What is it that Putin and Salman discussed? Was it Turkey's 'Iraq-Turkey [ITP] Pipeline' via ( somewhere in the matrix is an obscure Azerbaijan progenitor of a Caspian lineage?) Iraq's volatile northern-west 'Mosul- Kirkuk connection (Erbil Refinery/ISIS?) helping to fund the MB/ al Qaeda/ Al Nursa/ ISIS terrorist, gone-- fanatically 'Islamic Fatwa-Caliphate Sunnification into the Stone Age!'
This will work for Putin and Salman just fine, thankyou!
Ps: The USSA is funding the 'Shale Game',[no one of interest is going belly-up!) believe me, as they are going full retard transitioning behind 'EVs' and Hybrids,... eventually to Hydrogen Fuel already having been protoytped in Japan, and...[perhaps the Chinese will beat us here too?] we all know the drain on 'economies-of-scale', esp. EMs when energy becomes predictably manageable without having to go to war.
There has been an energy war going on since at least 2004.
Call it pipeline chess.
Europe has been seducing the Non-Russian energy producers. Kazahkstan, Tadjiks, Ukraine, etc. They use the US as a security provider and stick, while they play the carrot.
Russians play the opposite side. "You'll have our energy, at our prices, and none other." Geopolitics at their nastiest on all sides.
US has been substantively tied up in the Middle East due to Saudi and Israeli alliances...shale is the only way out of that...and frankly the more moral of the US's past oil choices. (competition - even tilted via reserve currency - is more moral than the killing done in the mid east and elsewhere...but I digress).
Russia plays hard ball with its neighbors ... because it has to.
They can't stand up to Russia militarily. But with a few years of independent oil profits fattening them up...they would be hard to re-bottle.
The 'Peak Oil' discussion has truly muddied the water...because it is not really possible to 'run out' of any demanded resource so long as open bidding is allowed. Rather, it just gets more and more expensive, with less and less sold. There's a substantive difference because at marginally higher price levels whole venues of new supply can open.
Don't really see a 'hydrogen' economy openning. Because it bonds to just about everything, and separating it out with any known technology uses more energy than it produces.
3 words: IRAN, IRAN, IRAN.
Look, Neptune's in Pisces until 2026 = oil & gas found everywhere by everybody (see Egypt last week?)
Read the Israeli press on that. It is humorous. They discovered huge gas reserves around 2011 and yet, because of politics, not one producing well has been drilled. And now the value of that gas has declined because Egypt now has its own gas.
Too funny. Politics strikes again.
OTOH Egypt is helped greatly -
Jeez .... It was not that long ago that when oil went up, stocks went down. Also, when the $ went up, oil went down. Things are so effed now. Like what exactly cause oil to go up 27 % for NO reason? And why didn't oil collapse yesterday after the REI inventory build followed in minutes by announcent that Obama has all his slime lined up in the Senate for the Iran deal?
Effing joke.