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Old 10-14-2014, 09:45 AM   #1
A.T. Hagan
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Default U.S. on track to exceed Saudi Arabia oil production

United States is expected to BEAT Saudi Arabia and become world's biggest liquid petroleum producer

http://www.dailymail.co.uk/news/arti...m-producer.htm

Peak Oil is upon us!
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Old 10-14-2014, 01:56 PM   #2
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This is why the price of oil has been dropping.

Saudi Arabia is pumping as hard as it can to drive the price down.

If they get it down then all of the wild catters and oil sand plays will die off and with it US and Canada production.

Then, prices will rise again.
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Old 10-14-2014, 02:00 PM   #3
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I don't think it's going to do them much good.
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Old 10-14-2014, 02:09 PM   #4
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I was thinking the same thing. OPEC has to walk a line of maximizing profits while not letting prices get high enough that is profitable for the more involved processes to come on line. I guess as Alan said, they haven't done it well.
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Old 10-14-2014, 04:04 PM   #5
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This article is dated 11 October and provides background:

Quote:
Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia

10/11/2014 18:19 -0400


Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be "aligned" with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia's will when the WSJ reported that "the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."



What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.

A glimpse of the answer was provided earlier in the article "The Oil Weapon: A New Way To Wage War", because at the end of the day it is always about oil, and leverage.

The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia...

... which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.
To wit:


Saudi Arabia to pressure Russia, Iran with price of oil

Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.

Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.

To pressure Iran to limit its nuclear program, and to change Russia's position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.

With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.

The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won't be able to affect Saudi Arabia's decision, Abanmy maintained.

The organization's decisions are only recommendations and are not binding for the member oil producing countries, he explained.
Today's Brent closing price: $90. Russia's oil price budget for the period 2015-2017?$100. Which means much more "forced Brent liquidation" is in the cards in the coming weeks as America's suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.
Source:


Quote:

Crude Crashing: Brent Is Most. Oversold. EVER
10/14/2014 14:39 -0400

Yesterday we lamented the ridiculously oversold levels in West Texas Intermediate, which as BofA calculated, has hit "oversold" levels for only the third time in six years. We assumed that this could be the basis for a short-term rebound. We were wrong, because we clearly had no idea just how determined the Saudis are to crush Putin into the ground courtesy of plunging oil prices.

As of moments ago, WTI has tumbled nearly $4, some 5%, to just over $81...



... which just goes to show how idiotic any reliance on charts is in a centrally-planned world, in which commodities are nothing but political weapons. Bottom line: based on its weekly RSI chart, WTI has just hit the most oversold levels since Lehman.



But to our rather great dismay, what is gong on with Brent turned out to be far worse, and as the weekly RSI indicator shows the selloff in Brent is now the worst, well, ever!


In other news: Andrew Hall, our condolences.
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Old 10-14-2014, 04:51 PM   #6
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The true marginal cost to the Saudis to pull a barrel of crude out of the ground is below $15. The numbers you see above are inflated to "account for" social spending in Saudi. That is, those numbers conflate an irrelevant issue.

The nation of Saudi Arabia makes a net profit on oil production above about $15/barrel.

US fracking plays in contrast, in Dakota and Texas, need about $80/barrel to just break even. So what we will see quite soon is small to medium US shale fracking firms giving up the ghost now.

Then oil prices will soar again. And people will see that this "Saudi America" nonsense for what it is..bullshit.
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