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Oil Production: the War for Market Share

Citi Commodities Strategist Ivan Szpakowski discusses the meltdown in commodities, the increase in oil production and what can be done to correct the slump. He speaks to Bloomberg’s Rishaad Salamat on “Trending Business.”

9 Comments on "Oil Production: the War for Market Share"

  1. rockman on Wed, 26th Aug 2015 9:28 am 

    As usual I don’t understand this concept of a battle over “market share”. I have not seen one report that any oil producer has been unble to sell a single bbl of its oil. IOW every exporter has had all the market share they needed even today with production booming.

    Did I miss some report about any oil exporter that had to cut back on production because they couldn’t find a buyer?

  2. BobInget on Wed, 26th Aug 2015 11:24 am 

    I don’t understand why any nation with an eye on its future would dispose of oil in the ground at sacrifice prices today when inevitably, oil prices will rise if only production cut-backs were put on.

    Unless…. that nation were in a fight for religious dominance with another powerful oil producer.

    In the past I always asked the question,. “what could possible go wrong?” when
    writing about two OPEC members in a long running proxy war.
    Well, Now, we know.

  3. apneaman on Wed, 26th Aug 2015 12:39 pm 

    Bob, you are overly obsessed with the religion angle. It’s used as a pretext, justification and to whip up frenzy among the sheep. Great for voluntary cannon fodder. Even the reformation was ultimately about economics/power. Constantine made Christianity the official religion of the Roman empire to consolidate power. And The religion of Islam was not totally spread by the sword – their empire was. If you surrender and accepted them as the new rulers and paid the tax you were left alone – no conversion necessary. In fact, if you were not Muslim you had to pay a little higher tax and after a time they were discouraging conversions because it was costing them too much. Only when things started to unravel from corruption, decadence and power struggles did the fundamentalism and oppression take hold as it is now all over the world in varying forms. It’s a very clear pattern throughout ape civilizational history – religion, ideology, ethnicity or any in-group out-group bias will do. It’s inherent in ape psychology and it’s been tested in thousands of controlled experiments and the results show that the behavior is highly predictable when groups compete under pressure. You can essentially split up any random group of apes and get them to participate in an arbitrary competitive tasks against the other group and they will quickly tribe up. Then mix the same people up into different groups and the same thing happens over and over again. Predictably ape behavior – easily manipulated – throw in some religion/ideology and some valuable resources and you get where we are today – the last decades of planet of the apes.

    Evolution of in-group favoritism

  4. BobInget on Wed, 26th Aug 2015 5:38 pm 

    Apneaman, speaking of history, Islam never went through a thirty years war, until today.

    The “New Thirty Years War”

    Certain individuals within the US establishment have been drawing the comparison between the Middle East today and the Thirty Years War in Europe in the 17th century, with Prof. Larry Goodson of the US Army War College being one of the latest individuals to make the comparison. Even though the parallels between Europe and the Middle East are by no means exact, it has become somewhat of a talking point within Western geostrategic circles.

    The Thirty Years War is a complex historical period, pertaining to numerous wars and conflicts fought by an array of power blocs for a variety of reasons. According to the Encyclopædia Britannica: “Although the struggles that created it erupted some years earlier, the war is conventionally held to have begun in 1618, when the future Holy Roman emperor Ferdinand II, in his role as king of Bohemia, attempted to impose Roman Catholic absolutism on his domains, and the Protestant nobles of both Bohemia and Austria rose up in rebellion.”

    The war quickly spread to embroil the majority of Europe’s major powers who either believed there was an opportunity to conquer neighbouring powers or were drawn into the conflict by a force invading their lands, and is regarded by historians as one of the most destructive periods in European history. Villages, towns and cities were raped and pillaged by mercenaries who were fighting for different power blocs, devastating the European continent.

  5. rockman on Wed, 26th Aug 2015 6:38 pm 

    Bob – I know it sounds to simplistic but back to the same answer: Cash flow is KING. It beats out profit margin and reserve consevation for nearly every producer: from the KSA and ExxonMobil to a very small one man company in S Texas.

  6. Makati1 on Wed, 26th Aug 2015 8:55 pm 

    Apneaman, I enjoyed your review of human psychology and history. Very concise and accurate in my view. Too many people refuse to look in the mirror or focus on their own country’s problems. They are quick to point out the mote in another’s eye. (Pardon the religious

    Too bad so many don’t seem to get it. The ability to focus is lost in most people today, especially Americans. Inability to concentrate for more than a few minutes and therefore, unable to piece together the whole picture of the world today from thousands of sources and peoples over days, weeks, months, and years. They jump from blurbs on books, to texting, to sound bite ‘news’, to the 60 second commercial (programming), to the Kardasians, to their favorite sports player’s latest sexcapade, to the crying baby, the microwave ding, the …, etc. If they hadn’t dumbed down education requirements in the US, few could make the grade and graduate or even pass. Learning is becoming a lost art in America.

    The first alpha male that declared he was the mouthpiece of the gods knew what he was doing. He was inventing a way to control people for his personal gain without force. THAT is the basis of ALL religions that have leaders and buildings of worship. Power, control, and a line of income not requiring work or force.

    Keep the educational comments coming!

  7. Makati1 on Wed, 26th Aug 2015 9:40 pm 


    “… but as much as I am pained by the current situation, I am still somewhat hopeful. There are still a few kids I’ve seen who seem to be able to call bullshit what it is and get on with their own learning. Whether they do well on the tests or not doesn’t seem to matter to them. They are curious and follow their own interests in subjects. More than that, I still think all of these kids still have a basic instinct to learn and will do well once they are out of high school. I just hope the colleges can give them a better learning environment than they got from here. “

  8. Apneaman on Wed, 26th Aug 2015 9:54 pm 

    Thanks Mak. The irony is that due to their enormous wealth most of the psychological research is done in the west and especially the US where the majority of the citizenry have access to it and the basic education to digest it. Which is a pretty good indicator that manipulating apes through propaganda is a much more powerful and far reaching tool than education. Yes they have been dumbed down in the last 30-40 years, but they can still read. It just doesn’t get through the biases and the attention span is shorter too, but that is from spending too much time staring at electronic screens – another co-opted propaganda tool. Best one ever. I will have to say plenty of research shows that we are natural born creationists – children studies specifically. Get em young before their mind are polluted by modernity type of deal. This guy, Paul Bloom from Yale U has done some of the research on it and plenty more. This vid provides a brief intro into many of the topics. Good shit.

    Big Think Interview With Paul Bloom

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