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Saudi Arabia's production increased to more than 11MMbd????

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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Wed 29 Feb 2012, 14:12:35

Wootan wrote:
misterno wrote:Remember; during the price run up to $147, there was a quote from Saudi's saying" we even have a full tanker in the ocean and we were trying to divert to any possible bidder but there was none". This makes sense because they were trying to take a huge profit from the high oil price but they were not able to sell their product because THERE WAS NO DEMAND. In other words, the price was pushed by PAPER DEMAND. Had the price been pushed by PHYSICAL DEMAND, Saudis would be able to sell their product.

So here is my question; how is it possible to bring down the oil price with physical supply when the oil price was not pushed by physical demand but paper demand? 8O

It is impossible. No matter how much you produce and create extra supply in the market, the paper demand which is options/futures/forward/short sale/ would create ARTIFICIAL DEMAND INFINITELY. I read articles about options predicting th oil to be $250.


For my part, I cannot remember that sentence from SA.

Artificial demand may of course be pushing the price some, but don't forget that oil is a physical product, differing from stocks in that respect. When the tanker arrives at the harbour, someone must take delivery, if you forgot to roll your speculative "artificial demand" future contract, they will dump it in your backyard :o At your expense!


I respectfully do not agree. That paper demand you are talking about be it options or futures CAN BE RESOLD AND PURCHASED INFINITELY. In other words, one option/futures contract can be sold and purchased millions of times and therefore create artificial demand until it expires. But till it expires there are thousands of other contracts that one can get into therefore pushing the price more upwards.

In conclusion, the demand for oil ON PAPER, can cause the price to go up infinitely although there is no physical oil exchanged during the transaction but only at the delivery which does not matter. Because till the delivery time (expiration) comes the price had already been pushed up creating a FALSE SENSE that there is more demand than supply in the market.

Make sense now?
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Wed 29 Feb 2012, 14:16:49

Humungus wrote:
misterno wrote:We all know that the oil peak price of $147 was reached not because of demand boom but because of speculation. Right now, we have the same speculation going on pushing Brent Oil to more than $125 even though there is huge demand destruction both in US and EU.


USA and EU are not alone on the buyer's market. In fact, many in debt loaded USA and Europe are slowly being pushed out from the oil market by demand from countries outside EU and America. Speculators or not, oil available on the export market has shrunk with some 15% since 2005. And there's also this money printing madness from central banks, especially The Fed and ECB, which has pushed prices on commodities and stocks even higher.


I understand but the reason I mentioned demand destruction in USA is because USA still consumes more than %20 of the whole global oil output. Currently USA's demand is equal to 2001 levels. Based on these numbers, I would assume price had to go down big time not up no matter howmuch Chinese or Indian consumption went up. Because their total consumption together is still way less than USA's.

So, this proves that the recent price run up is all beacuse of PAPER DEMAND not PHYSICAL DEMAND. Thus expect a huge price fall in the coming months like it did in 4-5 years ago.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby kublikhan » Wed 29 Feb 2012, 15:12:14

misterno wrote:I understand but the reason I mentioned demand destruction in USA is because USA still consumes more than %20 of the whole global oil output. Currently USA's demand is equal to 2001 levels. Based on these numbers, I would assume price had to go down big time not up no matter howmuch Chinese or Indian consumption went up. Because their total consumption together is still way less than USA's.

So, this proves that the recent price run up is all beacuse of PAPER DEMAND not PHYSICAL DEMAND. Thus expect a huge price fall in the coming months like it did in 4-5 years ago.
I am not expecting a huge price fall in the coming months. it is true that US oil demand(and OECD demand in general) is falling. However, the lower oil demand from OECD countries is more than offset by the rising demand from developing countries like China. For example, the OECD oil demand is projected to fall by 270,000 barrels a day this year. However, oil demand from developing countries is projected to increase by 1,160,000 barrels a day. thus their is a net increase in oil demand of nearly a million barrels a day. You can't just look at US oil consumption, even though it is the biggest oil consumer. You have to look at world oil consumption. And world oil consumption is rising, not falling. We already set a record for oil consumption in 2010(87 million BPD). We broke the record again in 2011(88 million BPD). And we are set to do so again in 2012 (90 million BPD).

World crude oil and liquid fuels consumption will grow from its record-high level of 87.1 million barrels per day (BPD) in 2010 to 88.2 million BPD in 2011, and will reach 89.6 million BPD in 2012, the U.S. Energy Information Administration (EIA) said on Tuesday.

Oil demand from major industrialized countries that comprise the Organization for Economic Cooperation and Development (OECD) will decrease by 0.6 percent, or 270,000 BPD, from a year ago. Among those countries, oil demand in the United States is expected to drop by 1.2 percent, or 230,000 barrels, a day.

However, oil demand from countries outside the OECD will increase by 1.16 million BPD, a 2.8-percent growth over last year, the report said.
World oil consumption expected to set new record in 2012: EIA report

Global oil demand—led by the United States and followed by China, Japan, and India—will dramatically increase over the next two decades. China has made oil deals around the world over the past few years that can deliver a supply of more than 7.8 billion barrels of oil to the country over the next several years. The United States must meanwhile prepare for a coming oil price crunch caused by increasing global demand and slowing global production.

Forecasts predict that future global oil demand will rise sharply. BP’s 2009 World Energy Review found that oil demand from developing countries outside the Organisation for Economic Co-operation and Development grew in 2008 despite the recession. The International Energy Agency’s newest Oil Market Report forecasts that global oil demand will hit a record high this year and will keep rising as the global economy recovers. And the World Energy Outlook projects that oil demand will grow by almost 25 percent from 85 million barrels per day in 2008 to 105 million barrels per day in 2030.

All this oil demand growth, according to the World Energy Outlook, “comes from non-OECD countries: OECD demand actually falls.” Demand among the developed countries in the OECD already peaked, but non-OECD developing countries want more oil to fuel their burgeoning auto industries caused by a growth in wealth.

More troubling is that a recent New York University study found that official energy agency projections are far too conservative, saying, “Total oil demand will be 138 mbd in 2030—about 30 mbd greater than what is projected by DOE, IEA, and OPEC.” They noted, “Our projections…are higher than projections by those three institutions…because we project rest-of-world growth that is consistent with historical patterns, in contrast to the dramatic slowdowns which they project.”

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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby AirlinePilot » Wed 29 Feb 2012, 15:26:24

I have not seen that chart. It sure is sobering. Somehow I doubt that we can manage those kinds of increases after the 2015 time frame. We might get by with a bit more increase in the "Not oil" for a little longer, but as others have noted, not without the complications that come with using food sources for burnable hydrocarbons.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby SeaGypsy » Wed 29 Feb 2012, 16:08:12

I think the OP is onto something, but it's not likely to be of any help. Paper trading is absolutely mandatory when you talk about shipping tankers full of anything around, oil no less than freight. The idea of a tanker rolling into port to sell physical oil to real customers on spot price is ludicrous and will never happen. Not until there is a profit to be made carting a few barrels around, which will eventually happen.

The Amero-centrist point of view is rife, that the US is so central to oil markets that what happens there automatically infects the rest of the global system. America sneezes, the world catches a cold. But in fact as this shift goes on, the world at large is become immune to the vagaries of the most inefficient oil user (besides biggest).

Meanwhile America runs around the world making war over control of oil, wasting more of it in the process than the whole of continental Africa uses and China busily sends envoys around the globe writing 30 year contracts of supply. It's crazy but that is what is happening. This is why no sensible person can take your countries election processes seriously. This reality is right in their faces and none of them are game to stop the trajectory. Ron Paul was the last hope and he looks like getting nowhere.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby Wootan » Wed 29 Feb 2012, 16:17:17

misterno wrote: I respectfully do not agree. That paper demand you are talking about be it options or futures CAN BE RESOLD AND PURCHASED INFINITELY. In other words, one option/futures contract can be sold and purchased millions of times and therefore create artificial demand until it expires. But till it expires there are thousands of other contracts that one can get into therefore pushing the price more upwards.

In conclusion, the demand for oil ON PAPER, can cause the price to go up infinitely although there is no physical oil exchanged during the transaction but only at the delivery which does not matter. Because till the delivery time (expiration) comes the price had already been pushed up creating a FALSE SENSE that there is more demand than supply in the market.

Make sense now?


I'm with you on the
creating a FALSE SENSE that there is more demand than supply in the market
, but not that it doesn't matter at the delivery. Of course price matters, someone must take delivery, at a price. A spec can't sell infinitely to other specs. With some other assets, a bubble can grow for a long time, far beyond common sense, even beyond sanity. Not so with oil.
infinitely
is a strong word.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Wed 29 Feb 2012, 20:33:48

SeaGypsy wrote:I think the OP is onto something, but it's not likely to be of any help. Paper trading is absolutely mandatory when you talk about shipping tankers full of anything around, oil no less than freight. The idea of a tanker rolling into port to sell physical oil to real customers on spot price is ludicrous and will never happen. Not until there is a profit to be made carting a few barrels around, which will eventually happen.


I am sorry I am not clear here. Why is it that oil trading CAN NOT be restricted to ONLY SPOT TRADING?

I understand that "locking up in price" would be impossible since you will pay whatever the price at the time of the delivery. But since the paper demand would be banned, the price swings would be less if not none and the price itself would be much cheaper due to no extra (paper) demand.

Of course this is my theory. :-D
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Wed 29 Feb 2012, 20:38:40

Wootan wrote:
misterno wrote: I respectfully do not agree. That paper demand you are talking about be it options or futures CAN BE RESOLD AND PURCHASED INFINITELY. In other words, one option/futures contract can be sold and purchased millions of times and therefore create artificial demand until it expires. But till it expires there are thousands of other contracts that one can get into therefore pushing the price more upwards.

In conclusion, the demand for oil ON PAPER, can cause the price to go up infinitely although there is no physical oil exchanged during the transaction but only at the delivery which does not matter. Because till the delivery time (expiration) comes the price had already been pushed up creating a FALSE SENSE that there is more demand than supply in the market.

Make sense now?


I'm with you on the
creating a FALSE SENSE that there is more demand than supply in the market
, but not that it doesn't matter at the delivery. Of course price matters, someone must take delivery, at a price. A spec can't sell infinitely to other specs. With some other assets, a bubble can grow for a long time, far beyond common sense, even beyond sanity. Not so with oil.
infinitely
is a strong word.


I agree that the word "infinitely" was strong. But you get the idea. :roll:
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby pstarr » Wed 29 Feb 2012, 20:50:11

so it was the evil speculators all along? Oh great. Now I can get back to WOWIII :-D
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby Pops » Thu 01 Mar 2012, 08:37:57

misterno wrote:We all know that the oil peak price of $147 was reached not because of demand boom but because of speculation.


We don't know that, in fact there is no evidence for speculation (other than hedging by producers and refiners) having a $10/bbl effect, let alone a $100/bbl effect - $1 here and there maybe.

Look on this chart at the point where consumption meets capacity around 2005, that's where the run-up began. When demand fell in '09 the price fell some but soon recovered and now that the economy seems to be trying to recover (?) demand and price is rising again.

Image


There is obviously a production shortfall: no spare capacity + record high price = production shortfall. I can't see any argument to refute that. Long term (30 years), demand has increased at a higher rate than capacity regardless of all the technology we can muster.

This is where the trendlines converge.

I obviously have no better idea than anyone else here of what KSAs capacity is or whether overall capacity can grow faster than it has the last 20 years but it obviously hasn't grown enough to contain the price the last 10 years.

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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Thu 01 Mar 2012, 09:21:15

Saudi Oil-Rig Use Soars as Obama Pressed on SPR Release: Energy Markets

http://www.bloomberg.com/news/2012-02-2 ... rkets.html

Saudi Arabia is deploying the most oil rigs in four years as it prepares for possible shortages caused by tension with Iran, giving President Barack Obama one less reason to answer calls to curb prices by releasing supplies from America’s emergency reserves.

The number of rigs used in the desert kingdom more than doubled in January from a year earlier, the biggest annual increase on record, data from Houston-based Baker Hughes Inc. (BHI) showed. As much as 1 million barrels a day of Iranian crude exports may be lost as the U.S. and Europe tighten sanctions against President Mahmoud Ahmadinejad’s government over its nuclear program, the International Energy Agency said Feb. 10.

March 1 (Bloomberg) -- Christoph Eibl, founding partner of Tiberius Asset Management, talks about outlook for gold and oil prices. He speaks with Erik Schatzker on Bloomberg Saudi Arabia used 49 rigs in January, compared with 48 in December and 23 a year earlier.

Saudi Arabia used 49 rigs in January, compared with 48 in December and 23 a year earlier.
Brent, the benchmark for more than half the world’s oil, rose to a 10-month high Feb. 24, propelling U.S. retail gasoline to the highest ever for this time of year. Democrats urged Obama last week to tap the nation’s Strategic Petroleum Reserve for the 18th time since 1985. Iran’s buyers in Asia and the European Union are cutting purchases to comply with sanctions, raising demand for alternatives at a time when supplies are disrupted in Yemen, Libya, Syria and South Sudan.

“There’s a desire in Saudi Arabia and the U.S. to control price volatility and reassure the market,” Sadad al-Husseini, founder of Husseini Energy consultancy in Dhahran, said in a phone interview on Feb. 29. That “is why Saudi is pumping near record levels. Releasing oil from the SPR would be one of the dumbest things to do. They are just saying that to try and bring prices down.” He is a former executive vice president for exploration and development at state-run Saudi Arabian Oil Co.


Saudi Arabia (OPCRSAUD) used 49 rigs in January, compared with 48 in December and 23 a year earlier, Baker Hughes, the world’s third- largest oilfield-services provider, said Feb. 7. The nation employed an average of 47 rigs in the fourth quarter, up from 39 in the previous three months. Rig use peaked at 57 in August 2007, as the country implemented a program to boost capacity to 12.5 million barrels a day.

The kingdom is producing 9.8 million barrels a day and has about 2.5 million barrels of spare capacity, Saudi Deputy Oil Minister Prince Abdulaziz bin Salman said during a visit to India last week, the same amount as Iran’s exports. The country boosted output to 10.047 million in November, the highest level since at least 1980.

‘Responding to Demand’
“The kingdom is responding to demand for more crude, and part of this demand is related to upcoming sanctions on Iranian oil,” Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London, said by e-mail on Feb. 27. “What could motivate a use of strategic stocks is the lost volumes of Syria, Yemen and South Sudan combined. Here you face actual supply disruptions, so the U.S. and the IEA may decide to release oil to bridge the gap as Saudi continues to pump more.”

China, Japan, India and South Korea, which together bought 59 percent of Iran’s oil in the first half of last year, are deepening ties with Saudi Arabia before U.S. sanctions against financial institutions against the Islamic republic take effect at the end of June. Chinese Premier Wen Jiabao, South Korean President Lee Myung Bak and Japanese Foreign Minister Koichi Gemba visited Riyadh this year to strengthen relations, while India asked for more oil on Feb. 23. tons more oil from Saudi Arabia next year.

‘No Need for Concern’
“The market is very much well supplied and there’s no need for concern,” Saudi Arabia’s Prince Abdulaziz said on Feb. 23 in New Delhi. “We have demonstrated to our friends here how much excess capacity there is today and how much capacity will be there in the future.”

Saudi Aramco is bringing the Dammam field, its oldest, back on stream this year, according to the Economist Intelligence Unit. The heavy crude is a “good” replacement for Iranian oil, said Caroline Bain, a senior economist at the London-based EIU.

“One explanation for reviving fields like Dammam is that the Saudis are currently overestimating their spare capacity, so they are drilling more as it looks like they may actually need to use it,” Bain said. “We estimate them to have about 3 million barrels a day spare currently, but perhaps the amount that’s readily available would be quite a lot less than that.”


“Releasing oil from the Strategic Petroleum Reserve would be, at best, a short-term benefit,” Senator John Barrasso, a Wyoming Republican, said in a statement Feb. 28. “This purely political move would cause more harm than good.”

“Saudi drilling is mostly independent of the use of the SPR because they act on different time horizons,” Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc. in London, said Feb. 27. “New rigs are going to have an effect in the medium-to-longer term, while the SPR is a short-term tool. The Obama administration has used the SPR before, so, if the circumstances were right, I wouldn’t rule its use out.”


The extra oil that they are exporting is heavy crude which most refineries can not refine or even they do not want to refine for technical and cost reasons. So I am thinking; are they selling this unwanted oil at a huge discount? Is there a link that can show me what the spread between Brent and Arab heavy crude?

I read somewhere that Saudis are thinking to burn this oil to generate power instead of selling with a huge discount to global market.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Thu 01 Mar 2012, 14:00:20

Any idea how this writer calculated the cost of oil extraction? Seems dubious to me

With oil prices seeking firm direction today – they were down slightly earlier, but turned positive around 11:30 a.m. – it might be worth thinking about how much it costs to produce the stuff.

Investment bank Sanford C. Bernstein looked at non-OPEC crude oil producers outside the former Soviet Union, and concluded that the marginal cost in 2010 was $83. U.S. oil prices spent much of that year below that level, though they were well above $90 by year-end.

Further, the bank’s analysts, led by Neil Beveridge, say initial 2011 data suggest the marginal cost had likely climbed near to or above $90. U.S. oil prices were well above $90 for most of the year, and went up to nearly $114, except for a stretch between early August and late October when they were largely below that level. Brent crude prices, which reflected what many buyers were paying, were even higher.

Now, they concluded, oil prices are 1.35 times the marginal cost of production. That may be good news for the profits of big and efficient oil companies. But, judging from what Mr. Beveridge and his colleagues have to say, the current oil rally – U.S. prices are up more than 8% this year – may be vulnerable.

“We think the marginal cost oil prices are unjustified relative to fundamentals,” they wrote. “While there is clearly in ‘Iran’ premium built into prices, ultimately high prices will squeeze out marginal demand and result in oil prices correcting lower.”


http://blogs.wsj.com/marketbeat/2012/03/01/oil-high-prices-to-squeeze-demand-says-analyst/
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby Wootan » Thu 01 Mar 2012, 14:38:52

That number of 90 $ seems far too high.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby kublikhan » Thu 01 Mar 2012, 15:04:55

misterno wrote:The extra oil that they are exporting is heavy crude which most refineries can not refine or even they do not want to refine for technical and cost reasons. So I am thinking; are they selling this unwanted oil at a huge discount? Is there a link that can show me what the spread between Brent and Arab heavy crude?
To give you a rough idea you could try looking here: Brent-Dubai

That measures Brent against Dubai, which is currently around a $4.75 a barrel spread. It looks like this spread varies from around $2 to $8. Arab heavy(SOSPAHAS) typically sells slightly cheaper than Dubai, but that can give you a rough idea. Looks like Arab heavy is currently around $0.85 cheaper than Dubai. So if I am reading this correctly and my math is right, it looks like the total spread between Brent and Arab heavy looks to be around $6.00. Not as high as I thought it would be.

Brent crude rose to an 11-week high compared with Dubai oil, even as the Mideast benchmark gained. The April Brent-Dubai (PVMMDBSP) exchange for swaps, which measures the European benchmark contract against the Middle East grade, rose 5 cents to $4.30 a barrel, the highest since Nov. 28 and the third day of increases, according to PVM data. The May contract was also up 5 cents, to $4.10.
Mideast Crude Rises as Brent Trades at 11-Week High Over Dubai
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby kublikhan » Thu 01 Mar 2012, 15:52:46

misterno wrote:Any idea how this writer calculated the cost of oil extraction? Seems dubious to me
Well, the author is talking about the marginal cost of oil. That is the cost of bringing an additional barrel of oil online. He is not talking about average costs of oil currently being produced. Naturally, new oil is going to be more expensive than current oil as we go for the cheap and easy stuff first and save the expensive and hard stuff for someone else. And he states he is not talking about OPEC or Russian oil, which is much cheaper than other sources of oil. Also, marginal costs are full life cycle costs, not just extraction costs. Marginal costs are going to be higher than extraction costs. For example, cheap middle east oil may have extraction costs of around $10 a barrel. Marginal costs are closer to $20 a barrel. Here is an example of extraction costs alone:

Image

and some numbers on marginal costs around the world:

In Saudi Arabia, home of the world's cheapest oil, producers face a full life cycle (that is, including amortisation and cash costs) marginal cost of US$20 per barrel. In Russia, it's about US$25.

North Sea fields have a marginal cost of about US$60 while the new deepwater discoveries off the Brazilian coast are expected to cost US$70 per barrel.

Deepwater production from Angola and Nigeria, considered (along with offshore Brazil) to be exciting new frontiers, operate with marginal costs of about US$90 per barrel. And at US$100 per barrel and more, Canadian tar sands and unconventional sources come into play.
When oils ain't oils

So marginal costs vary widely. And that article was from 2009. I think I read a more recent article that said some new technology and techniques have lowered the marginal cost for a barrel of oil in the tar sands. But it is good to give you a rough idea. And if you are talking those expensive ultra deep water projects or tar sands, The author in your article is in the same ball park as my numbers.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Thu 01 Mar 2012, 16:08:26

In Saudi Arabia, home of the world's cheapest oil, producers face a full life cycle (that is, including amortisation and cash costs) marginal cost of US$20 per barrel. In Russia, it's about US$25.

North Sea fields have a marginal cost of about US$60 while the new deepwater discoveries off the Brazilian coast are expected to cost US$70 per barrel.

Deepwater production from Angola and Nigeria, considered (along with offshore Brazil) to be exciting new frontiers, operate with marginal costs of about US$90 per barrel. And at US$100 per barrel and more, Canadian tar sands and unconventional sources come into play.
When oils ain't oils

So marginal costs vary widely. And that article was from 2009. I think I read a more recent article that said some new technology and techniques have lowered the marginal cost for a barrel of oil in the tar sands. But it is good to give you a rough idea. And if you are talking those expensive ultra deep water projects or tar sands, The author in your article is in the same ball park as my numbers.


I am not saying you are wrong. It is just that the idea of "marginal cost being $90/brl" makes me uncomfortable. If this is true, then the price of oil can NEVER go below this level. If it does, then all the producers with this cost will stop producing. But then who will supply 8-9 billion people some of which live in economies growing close to %10 a year. I am hoping that this writer is wrong in his calculations/data/research.
Last edited by Tanada on Fri 02 Mar 2012, 06:55:17, edited 1 time in total.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby rockdoc123 » Thu 01 Mar 2012, 16:25:18

I am not saying you are wrong. It is just that the idea of "marginal cost being $90/brl" makes me uncomfortable. If this is true, then the price of oil can NEVER go below this level. If it does, then all the producers with this cost will stop producing. But then who will supply 8-9 billion people some of which live in economies growing close to %10 a year. I am hoping that this writer is wrong in his calculations/data/research.


not exactly. The marginal cost refers to what it takes to explore for and produce a new barrel of oil, not what it costs to "lift" a barrel in the ground with infrastructure in place.
In SA, for example, the lifting cost is just a few dollars/bbl but the marginal cost is a lot higher (my guess based on what it cost them for the Mega-projects is it is somewhere around $50 or so, but just guessing). For SA the more important figure to understand is that because they count on oil for almost all of their income they actually require around $80 to balance their budget.

So producers can continue to produce below marginal cost as long as they are still above operating cost (essentially lifting cost), they just can't afford to bring new production on stream.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby vtsnowedin » Thu 01 Mar 2012, 16:42:06

misterno wrote:[I am not saying you are wrong. It is just that the idea of "marginal cost being $90/brl" makes me uncomfortable. If this is true, then the price of oil can NEVER go below this level. If it does, then all the producers with this cost will stop producing. But then who will supply 8-9 billion people some of which live in economies growing close to %10 a year. I am hoping that this writer is wrong in his calculations/data/research.

Well never say never, with a worldwide depression and a major drop in demand it can and probably will drop well below $90 for a while and perhaps more then once. Over reasonable periods of time though it is going to average above $90 or whatever the actual marginal cost is from now on. If it is not $90 today it soon will be. Welcome to Peak oil or at least peak cheap oil.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby AirlinePilot » Sun 04 Mar 2012, 13:22:00

How about we get the thread back on track and figure out if the 1mbpd is bullsh1t or not?

Personally after very little time looking into it I call shenanigans on that number.
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Re: Saudi Arabia's production increased to more than 11MMbd?

Unread postby misterno » Mon 05 Mar 2012, 09:35:56

How can one country or say Saudi Arabia lie about production or export figures? How is that possible?

What if they claim they are exporting 15MMbd tomorrow? Who is to prove otherwise and how do you prove that?
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