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Oil Traders Punk'd By Schizophrenic Comments From OPEC

Tyler Durden's picture




 

And so it begins:

To which we noted:

Quickly followed by this...

 

The end-result: traders, well algos really as no carbon-based trader was fast enough to react to this, punk'd:

 

As we noted just minutes ago,

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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Wed, 12/02/2015 - 11:29 | 6865576 JustObserving
JustObserving's picture

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.

Wed, 12/02/2015 - 11:32 | 6865598 THE COIN
THE COIN's picture

Translation : They were Ball Pein Monkey Hammered.

Wed, 12/02/2015 - 11:58 | 6865711 balanced
balanced's picture

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.

Wed, 12/02/2015 - 11:34 | 6865601 Payne
Payne's picture

The Saudis are desperate for revenue, does anyone really think that cutting production will raise overall revenue ?

Wed, 12/02/2015 - 11:43 | 6865640 Albertarocks
Albertarocks's picture

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?

Wed, 12/02/2015 - 11:47 | 6865656 JIMSJOE2
JIMSJOE2's picture

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?

Wed, 12/02/2015 - 13:16 | 6866119 KnuckleDragger-X
KnuckleDragger-X's picture

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.......

Wed, 12/02/2015 - 11:32 | 6865594 Mewa
Mewa's picture

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.....

Wed, 12/02/2015 - 11:36 | 6865605 margincall575
margincall575's picture

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.

Wed, 12/02/2015 - 11:35 | 6865603 buzzsaw99
buzzsaw99's picture

if iran wants it then the ksa probably doesn't

Wed, 12/02/2015 - 11:40 | 6865608 two hoots
two hoots's picture

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.   

  

Wed, 12/02/2015 - 11:38 | 6865614 Usura
Usura's picture

ISIS has already cut production

Wed, 12/02/2015 - 12:18 | 6865809 Joenobody12
Joenobody12's picture

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.

Wed, 12/02/2015 - 11:38 | 6865616 MadVladtheconquerer
MadVladtheconquerer's picture

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.

 

Wed, 12/02/2015 - 11:48 | 6865661 Johnny Horscaulk
Johnny Horscaulk's picture

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???

Wed, 12/02/2015 - 12:40 | 6865903 MadVladtheconquerer
MadVladtheconquerer's picture

"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?

 

Wed, 12/02/2015 - 14:46 | 6866629 Baa baa
Baa baa's picture

I was wonderin'... Do you have a "Special realtionship" with the Impaler?

Wed, 12/02/2015 - 11:40 | 6865623 sidiji
sidiji's picture

That's because the Saudis getting their hairy butts kicked by the Yemenis, and mercs costs money

Wed, 12/02/2015 - 11:42 | 6865634 Downtoolong
Downtoolong's picture

 

“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.  

  

Wed, 12/02/2015 - 14:14 | 6866438 Expat
Expat's picture

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.

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