Oil Tumbles After Saudis Report Big Jump In Production; Kuwait Warns Of Drop To $45

Tyler Durden's picture

Just as WTI was trying to record its first increase in 6 days, the latest, March, OPEC monthly report was released which revealed something surprising: while secondary sources claimed that Saudi Arabia production declined by 68kbpd to 9.797mmbpd, according to Saudi's own numbers, the kingdom ramped up production in February by a whopping 263kpb, back over 10 million barrels per day.

While the Saudi surge was a surprise, the kingdom contained itself to producing within its permitted quota, which as per the Vienna agreement is at 10.058mmbpd.

Perhaps just as concerning is that as a result of the vast gap between the self-reported Saudi production, and the far lower secondary sourced one, the official OPEC production number is now quite suspect: according to the cartel, in February, total production declined by 140kbpd to 31.958mmpd, however thwas number is driven by a Saudi number that is over 200kbps below the one reported by Saudi Arabia itself, and as such one can argue that in February total OPEC production actually rose if using primary source data.

Finally, the straw that broke the oil rebound's back came from Kuwait's oil minister, Issam Almarzooq, who said at the same time as the OPEc report was released that oil risks dropping to $45/barrel as a result of rising shale production, as well as other factors.

The result: WTI has tumbled following the OPEC report and Kuwait statement.

Erasing the entire OPEC production cut surge.

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SallySnyd's picture

Here is one of the key factors that will impact the price of oil in the future:

 

http://viableopposition.blogspot.ca/2016/11/the-wolfcamp-shale-and-ameri...

 

Given that the global economy is weakening, this factor could have an even more negative impact on prices in the near future.

VinceFostersGhost's picture

 

 

Did anyone catch the Galveston tanker report today.

 

Was maybe thinking about going fishing.

MalteseFalcon's picture

Where is everyone finding this cheap oil?

It's amazing how oil shows up when governments need money.

You'd almost start to believe that the price and availability of oil was largely a political decision.

Nah.  Can't be.

EROI and finite world after all, right?

political_proxy's picture

What i did catch was the OK on the US arms sale to the Sauds.

Next thing ya know the announced (perhaps) they will increase oil production then, magically, prices drop.

 

8774_44887's picture
8774_44887 (not verified) political_proxy Mar 14, 2017 10:58 AM

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... http://bit.ly/2jdTzrM

brianshell's picture

Production rises just before the prince visits Trump.

Jim Willie posited that SA may want the oil under Yemen.

buzzsaw99's picture

release the kraken (spr)

is gartman long crude in yen terms by any chance?

lovemesomeZH's picture

Off topic But more important!    http://truepundit.com/exclusive-fbis-own-political-terror-plot-deputy-di...

 

McCabe, the second highest ranking FBI official, emphatically declared at the invite-only gathering with raised voice: “Fuck Flynn and then we Fuck Trump,” according to direct sources. Many of his top lieutenants applauded and cheered such rhetoric. A scattered few did not.

World Cash Day's picture

Doubtful because Trump would sack his arse for something like this.

Therefore it can't possibly be true.

brianshell's picture

George Webb kept referring to McCabe. Pull out the white board and assemble all the puzzle pieces. This is real chess.

pc_babe's picture

When will I see it at the pump?

VinceFostersGhost's picture

 

 

Well.....it's a little complicated.

VinceFostersGhost's picture

 

 

Double post.......inconceivable!

buzzsaw99's picture

fuel is actually free, what you pay at the pump is 100% taxes, so, well, uh, never.

political_proxy's picture

That's right, McMath. 

Everykone knows a tax on zero always yields more than zero.

PT's picture

I really would like to do my part and prop up the oil prices through excessive consumption but I never scraped together enough money to buy a 5 litre V8 and my current ride can go quite hard and still give me an average 50 mpg (Imp)*.  Guess I need to ride it harder and travel greater distances.

* These things happen when your vehicle basically consists of two wheels and an engine.

Nunyadambizness's picture

Never.  You know the game, they'll blame anything and everything for their immediate and significant price increases, then will only decrease the price in miniscule steps over a month or two when the price drops.  

Arnold's picture

Time to maintain and change over to summer fuel.
And Gulf hurricane season.
And pipeline problems. Low flow mainly.

http://blogs.platts.com/2016/01/04/declining-taps-crude-fuel-for-thought/

Sir Lars's picture

Perhaps a little mercy will be allowed after a long hard big oil gang raping...

blown income's picture

All bullshit man...everything. ..

FreeShitter's picture

Indeed, let it drop to 25 fuck this corrupt industry.

Bank_sters's picture

The only thing keeping the shale industry alive in ND are low interest rates and easy credit.

E.F. Mutton's picture

It's not low enough until we see Gold Toilets in Riyadh Pawn Shops

NoWayJose's picture

Nice of the Saudis to increase production after telling everyone they are 'cutting' production as part of the OPEC production cut 'deal'.

mily's picture

Hedgies must be sweating, why would you pay 2/20 for such shitty market followers? Getting long, long after the deal where they actually should have short the fuck up....

thecondor's picture

CNBS has a headline that "OPEC's oil production ticks down in February as Saudis cut output more deeply"

WTFUD's picture

. . . and all the while the US Debt hits $19.9 Trillion; only $83 Billion ( or Zuckerberg's net worth ) away from 20 Large.

World Cash Day's picture

This crap is designed to stop the Fed raising interest rates tomorrow.

That is all it is.

Plunging oil prices will halt the Fed.

Dangerclose's picture

I think the Saudi prince told Trump at their meeting to either buy a large stake in the ARAMCO IPO or face a depeg on the dollar. "Buy in or its the end of the petro-dollar!"

So was the price drop due to a big Fuck-you from Trump?

Houses Depreciate's picture

This is very positive economic news. 

 

What we intuitively know and understand is this; Nothing accelerates the economy, creates jobs and raises the standard of living like falling prices to dramatically lower and more affordable levels. Nothing.

AlNiko's picture

Are we back at the Jan2016 moment - this time with no return.

tbone10's picture

Oh no the sky is falling again... you miserable twats

bankbob's picture

The Saudis sold their oil bonds based upon last month's prices.  Now, they will open the spiget and prices will tumble.

sinbad2's picture

Supposedly US shale and off shore producers needed $60 to be viable, then came the claims that with efficiency gains(interest free loans) they could turn a profit at $50.

So of course oil will drop below $50. Everytime the US makes threats of war, they(Russia, Iran, China) respond financially.