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Oil Traders Punk'd By Schizophrenic Comments From OPEC
And so it begins:
IRAN SAYS MAJORITY OF OPEC MEMBERS AGREE ON OUTPUT CUT: SHANA. trial balloon time
— zerohedge (@zerohedge) December 2, 2015
To which we noted:
majority of OPEC members likely does not include Saudi Arabia
— zerohedge (@zerohedge) December 2, 2015
Quickly followed by this...
And there it is: SAUDI ARABIA, GULF ARAB COUNTRIES DON'T SUPPORT CUT: SHANA
— zerohedge (@zerohedge) December 2, 2015
The end-result: traders, well algos really as no carbon-based trader was fast enough to react to this, punk'd:
Of course, no production cut can work unless all members agree to a plan and implement it cohesively. Aside from a select few Gulf States, most of the OPEC membership is expected to heavily lobby Saudi officials to cut production.
But in reality, Saudi Arabia will be the one to determine OPEC’s next step. As the only country with significant spare capacity, not to mention cash reserves and the political wherewithal to actually impose production cuts, Saudi Arabia will decide whether or not OPEC moves to cut its output quota.
Finally, here is the full punking report from Iran's Shana:
Majority of OPEC Members Agree on Output Cut: Iran
Majority of member states of the Organization of Petroleum Exporting Countries (OPEC) agree on a reduction in the crude oil production to keep up prices with an exception of Saudi Arabia and Persian Gulf Arab countries, said director general of OPEC and energy forums in the Iranian Ministry of Petroleum.
"Under current international conditions between Iran and certain Persian Gulf littoral states, it is unlikely that these countries voluntarily cut their output so that Iran can return to the global crude oil markets provided that political relations improve," Mehdi Asail said on Wednesday.
According to the Iranian official who was talking to Shana on the eve of the 168th ministerial meeting of OPEC to be held in Vienna on Friday, the real challenge before the organization is lack of a genuine agreement over the way of managing supply in order to establish stability in the oil market.
Iran has officially announced that it will increase production for 500,000 barrels a day immediately after sanctions are lifted. Another increase of similar amount will follow within weeks so that Iran's export will be back to the pre-sanctions quota.
Minister of Petroleum Bijan Zangeneh has said hat Iran does not need the permission of any country to increase its crude oil production.
Saying that ousting Iran's oil from the market was an "oppressive and illegal" act, the minister stressed, "Our return to the market does not require the permission of anybody. We are not expecting approval of the letter by other member states."
Speaking to Shana, he confirmed Iran has sent letters to the member states to inform them of the intention to boost its output.
"The letters were meant to inform them to include the increase in the production plans of the organization," he added, "Iran did not write letter for their approval."
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Saudi Arabia takes its orders directly from Washington. The Nobel Prize Winner's multispectrum war on Russia has the key strategy of keeping oil prices as low as possible as 50% of Russia's exports are energy.
Translation : They were Ball Pein Monkey Hammered.
If you want to know what's going to happen, just think greed and stupidity. The Saudis treat their oil just like US politicians treat credit - they take as much as possible, as greedily as possible. If oil is cheaper, then they will "produce" more of it in an attempt to support the lifestyle to which they've become accustom. This will result in greater global oil supply, which will result in even lower prices, which will necessitate even higher output, which will... you get the point.
If you can imagine US politicians behaving responsibly with regard to debt and credit, then I suppose you should bet on the Saudis cutting production.
The Saudis are desperate for revenue, does anyone really think that cutting production will raise overall revenue ?
Right. So that makes a pretty strong case that their determination to keep prices down is based on reasons even more important to them than their crashing revenues. What on earth could that reason be?
The answer is yes. If all agree to cut production, prices would rise. But on the other hand, with the dollar becoming more and more stronger against other currencies, the price could continue to fall regardless of how much production is cut. So the answer is no! Does that answer your question?
I think that the Saudis are insane independently of DC. When you can cut the head off of people who disagree with you, your viewpoint gets a teensy bit warped.......
Dont try to outthink yourself from that crackerjack box.....the US adminstration doesnt even know what day of the week it is.....Saudis will do what they please....that is destroy US fracking....Obama will flap his gums about climate change while the depression morphs into the mainstream economy....bend over for your govt...you are screwed and here it comes.....
same meme as any matters in the equities ponzi. Its to knock the knees out of Putin . .Nothing else. ALL assets are determined not discovered.
if iran wants it then the ksa probably doesn't
Oil spiked then fell as quickly.
Interestingly tied to the release of EIA news of inventory build?
Thought:
Before, wealth could control areas, regions, then states, countries and now concentrated wealth can impact the world. A Saudi family decides what the world pays for gasoline? Other families or collective groups will soon decide the same for other needed products. Governments are becoming obsolete and ineffective, wealth, transparently, now rules.
ISIS has already cut production
If Russia cut all ISIS production, it will amount to 330K bpd which is quite asubstantial. Russia should just drop a bomb or two by mistake on Saudi oil facilities.
Iran voting for a production cut??!!!!!! bwahahahahahahahahahahahahahahahahahahahhaha
Yaaa, by everyone else so they can gain market share! bwahahahahahahahahahahahah
Meanwhile, back at the ranch, inventory builds of 1.2mill barrels plus an increase in distillates even
w/ refinery cap utilization at 94.5% reported by the EIA. Inventory stands at 489.4mill barrels compared to
492mill at the peak in April.
http://ir.eia.gov/wpsr/wpsrsummary.pdf
WTI now at 40 handle.
Why wouldnt they want more market share after years of unfair sanctions hobbled their economy?
https://en.m.wikipedia.org/wiki/U.S._sanctions_against_Iran
Particularly since the us and israel got steeply discounted oil essentially stolen from the iranians by the shah regime installed after the cia coup?
A regime whose secret police would make even israeli stormtroopers blush
http://newint.org/features/1980/09/01/western/
Well - maybe not.
http://www.theguardian.com/world/2004/nov/24/israel
No wonder idf pussies couldnt beat hezbollah resistance fighters despite having much better weapons, aye, Vlad (or are you in another One of your accounts again, Precious???
"Why wouldn't they want more market share..."
You have a commanding grasp of the obvious. Now, let me lead you to the logical conclusion:
Why would especially Saudi (or anybody else in OPEC) cut production in order to surrender marketshare to...wait for it.... Iran?
I was wonderin'... Do you have a "Special realtionship" with the Impaler?
That's because the Saudis getting their hairy butts kicked by the Yemenis, and mercs costs money
“no production cut can work unless all members agree to a plan and implement it cohesively.”
Let this be a lesson to all the climate change fanatics. OPEC is the perfect analogy for how and why that cartel will fail too.
If anyone deserves to be punk'd, it's oil traders, especially the ones using algo's.
I would also comment that any oil trader stupid enough to trade OPEC commentary during the meetings might as well hand his credit cards and house key directly to the big boys.