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Page added on May 12, 2017

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OPEC to U.S.: Please produce less oil for the ‘prosperity of the world economy’

Production

OPEC, the oil cartel really cares about the world. That’s the message of a new monthly report issued Thursday. OPEC says what the world needs now is a bit less supply on the global oil market. In particular, they would really appreciate it if the United States would stop producing so much damn oil…for the good of the world of course. From CNN Money:

The report said that balancing the market would “require the collective efforts of all oil producers” and should be done “not only for the benefit of the individual countries, but also for the general prosperity of the world economy.”

OPEC said that one producer in particular is to blame: The U.S., where shale producers have continued to ramp up their drilling despite lower crude prices.

The increased production has undermined OPEC’s efforts to keep prices between $50 and $60 per barrel.

Last December, Jazz wrote about OPEC’s decision to cut production for six months in an attempt to drive oil price up. The plan worked. Soon after the announcement was made, prices rose above $50 a barrel. OPEC members made clear at the time that it wanted prices higher but not above $60 a barrel because the low-60s is where U.S. shale would become competitive again. If prices were to settle in that range, it would mean a whole bunch of new drilling in the U.S.

But the OPEC effort didn’t work for long. Prices are back below $50 a barrel now and thanks to increased efficiency, U.S. producers can still make money at those prices. Now OPEC has to decide whether to extend the production cuts into the latter half of the year or simply give up on the effort. Nitesh Shah, a commodity strategist at ETF Securities, says OPEC’s strategy has been a bust. He writes, “repeating the same strategy for another six months will do little to shore up oil prices.” “OPEC nations have given up market share and have barely reaped any price gains,” he adds.

OPEC could try even deeper production cuts but OPEC members won’t like that. So OPEC is left begging the U.S. to give them a break for the good of the world economy. We could do that, but here’s another thought: Let’s continue taking their market share and reducing their control over the world’s energy market.

Tom Pugh of Capital Economics tells CNN, “I think [OPEC] are now acutely aware that they don’t have the kind of influence they used to have 10 years ago, and that shale is now the swing producer in the market.”

Hot Air



43 Comments on "OPEC to U.S.: Please produce less oil for the ‘prosperity of the world economy’"

  1. rockman on Fri, 12th May 2017 12:52 pm 

    Actually by the US providing the world with abundant (the US is the largest provider) refined products at lower prices the global economy can better afford we are stimulating growth by some degree. And that ultimately increases demand. Or, at least, helps the global economy from slipping. And a significant reason for those lower refinery product prices is the lower price of oil. Historically refinery margins are inversely proportional to oil prices. And those better margins allow the refineries to price products cheaper. And the US refinery industry is putting some of those profits to good use: adding $50+ BILLION in infrastructure to cope with the changing oil markets.

    Of course individual US companies aren’t the least bit concerned about the global economy, the KSA or any other country’s oil revenue, the US economy or even the viability of the US petroleum industry. Each company is focused solely on one metric: its profitability. Speaking on behalf of each company: the rest of all of you can go f*ck yourselves. None of those company has ever accepted such responsibilities.

    As always: it’s not personal…just business.

  2. Boat on Fri, 12th May 2017 1:18 pm 

    Efficiency plays a role in reduced costs but the real story is the gains in production over the last three years. You hear this story of how producers are drilling the best areas now. From Texas to Canada production had doubled, tripled or quadrupled. From under 100 barrels a day to 660/ the Permian. All in the last three years. Smells like tech to me. Tech tech tech glut glut glut. So sorry Saudiet, Russiet.

  3. GregT on Fri, 12th May 2017 2:17 pm 

    “You hear this story of how producers are drilling the best areas now.”

    Right Boat, humans are stupid like that. They always go after the least profitable finite resources first, AKA the dregs, and save the best for last.

  4. Anonymouse on Fri, 12th May 2017 4:08 pm 

    Rocketscientist says

    “refined products at lower prices the global economy can better afford we are stimulating growth(demand by another word) by some degree”

    But rockerman, you’ve been telling everyone that ‘consumers’ dictate and control the uS oil cartels activities and priorities. That ‘demand’ is purely a ‘consumer’ driven(ahem) phenomenon’, totally divorced of any input from ‘producers’. Try to keep your talking points straight would you. Or is it ‘consumers’ are to blame only when oil spills, leaks and explosions are involved?

    And boatietard IS stupid like that, and in every other was well. The dregs of the comments section pretty much belong to him.

  5. onlooker on Fri, 12th May 2017 4:22 pm 

    Is this the tech you mean Boat
    http://oilprice.com/Energy/Energy-General/Tech-Miracle-In-US-Shale-Is-A-Media-Myth.html
    “I am tired of hearing about the unbelievable impact of technology on collapsing U.S. shale production costs. The truth is that these claims are unbelievable. The savings are real but only about 10 percent is from advances in technology. About 90 percent is because the oil industry is in a depression and oil field service companies have slashed prices to survive.”

  6. makati1 on Fri, 12th May 2017 5:39 pm 

    Be patient. The American oily industry is already failing. It will soon collapse along with the rest of the bubbles supported by the Fed printing press and lies. Bring it on!

  7. Mike on Fri, 12th May 2017 7:34 pm 

    Rockman, oil imports to the US, necessary to export refined products, is at a three year high and going higher. As to US shale oil companies being “profitable,” find me one. Find me one who is out of debt and whose drilling budget is less than its net cash flow. You won’t be able to. The American shale oil industry is racked with debt it cannot NEVER pay back.

    Almost every oil producing country in the world has cut it’s production in an effort to raise prices, except the US shale oil industry. Prices are now below what they were last October, before OPEC cut.

    So, on behalf of independent conventional oil operators everywhere in America, that work for themselves and spend their own money, who need higher, at least more stable oil prices, please go f*ck yourself.

  8. Boat on Fri, 12th May 2017 8:41 pm 

    Onlooker,

    You ignore the very point I brought up. If not tech how can the Permiam after being drilled for decades all the sudden in three years go from 100 barrels a day to 660 bpd. All the sudden at 660 bpd 10’s of billions are pouring in. You doomers just have no clue to the obvious starring you in the face. Are you Canadian?

  9. CIA-MOLE on Fri, 12th May 2017 8:42 pm 

    be careful with your computer and where you click. NSA derived ransom-ware is holding your data hostage.

  10. onlooker on Fri, 12th May 2017 9:39 pm 

    CIA is right, some nasty ransom-ware is going all over the planet. End of the Net?
    Oh and Boat yes technology has unlocked many more reserves but the question is about costs and what is driving it down.

  11. Cloggie on Sat, 13th May 2017 7:59 am 

    Be patient. The American oily industry is already failing. It will soon collapse along with the rest of the bubbles supported by the Fed printing press and lies. Bring it on!

    For makati collapse is reason for a party. And if necessary the collapse should be initiated just to speed things up a little.

    The whole world as a giant collapse theater for the amusement of makati:

    https://www.youtube.com/watch?v=h36j7aSsYWo

  12. rockman on Sat, 13th May 2017 8:04 am 

    “…you’ve been telling everyone that ‘consumers’ dictate and control the uS oil cartels activities…”. And thanks for pointing out just how true my statement is true. That is, unless you want to explain to every here that “refined products at lower prices” are not the result of consumer pressure but instead are gifts from their benevolent overlords of the petroleum industry.

    Just some friendly advice: your anti-industry prejudice is so strong you don’t even hear yourself when you post such illogical (and thus so easy mocked) posts as you just did. You might seek some profession help…I’ve done all I can. LOL.

    And if you want to disagree with my assessment let’s have a vote from our cohorts. So here’s the ballet:

    A – Rockman’s position: the low price of refinery product is set by the limit of what global consumers will pay.

    B – Anonymouse’s position: consumers would readily pay more then the current prices for refinery products but the industry doesn’t want a higher profit margin at their expense. That just wouldn’t be fair.

    BTW for those voting B feel free to send a thank you note to the new CEO of ExxonMobil. Granted Rex gets the credit but he’s a tad occupied at the moment. LOL

  13. rockman on Sat, 13th May 2017 8:44 am 

    “If not tech how can the Permiam after being drilled for decades all the sudden in three years go from 100 barrels a day to 660 bpd.” Actually a combination of advanced drilling/completing tech, oil prices (adjusted for inflation) still 30% higher then the historic average AND public oil companies are as desperate as ever to add reserves to their books.

    Just MHO but if the entire petroleum industry were 100% private companies and no pubcos much fewer shale wells would have been drilled even when oil was $90+/bbl. Such as Rockman’s company that, during that time, spent $230 million its first 3 1/2 years drilling deep conventional NG wells and not $1 in the shale trends.

  14. twocats on Sat, 13th May 2017 12:11 pm 

    either the global economy can be allowed to limp along while the oil economy continues on life support, or vice versa. can’t have both.

    the problem with global economy going on life support is obvious: people start losing pensions and 401ks, old americans can’t retire, and retired americans get angry and vote.

    the problem with oil economy remaining on life support is that any number of oil dependent countries and companies can and will continue to collapse. as long as it isn’t happening to my country or company then I suppose it doesn’t matter, so that is the preferred of the two.

    global economy is majorly due for a correction / recession, but that is the very event that will never be allowed to take place ever again so-help-them-Central-Bank Amen. so we will go with zombie-oil until the explorationlessness finally finally catches up in 2022, 12 years after the last gasp of 2010.

    https://www.iea.org/newsroom/news/2017/april/global-oil-discoveries-and-new-projects-fell-to-historic-lows-in-2016.html

  15. GregT on Sat, 13th May 2017 12:30 pm 

    “CIA is right, some nasty ransom-ware is going all over the planet.”

    Apparently this virus attacks Microsoft based systems only. Glad I’m on a Mac.

  16. onlooker on Sat, 13th May 2017 1:01 pm 

    I envy you Greg. MS windows is crap

  17. GregT on Sat, 13th May 2017 2:02 pm 

    I hear you onlooker. I gave up on Win-doze about a decade ago now.

  18. Cloggie on Sat, 13th May 2017 2:47 pm 

    2005: “by 2015 the industrial party is over”
    2017: “please produce less oil”

    ROFL

  19. twocats on Sat, 13th May 2017 3:16 pm 

    2005 Housing prices will never go down, ever

    2009 Oh sh*t

    2017 housing prices will never go down, ever

    so yes, some 2005 analysts were unable to take into account mini-collapses, global industrial step-downs, into their theory of PO dynamic.

    I can easily get us to 2100: have a 20 year depression that wipes out 15% of global population, and reduces daily demand for oil by 25%. Done – Peak Oil 2100. Are you ready to volunteer for the culling?

  20. Apneaman on Sat, 13th May 2017 3:22 pm 

    hair clog, some individual’s failed prediction(s), is evidence of fuck all – meaningless. Only those with no real debating points use that low level rhetoric.

    When it comes to cornucopia progressives like you, I have no lack of evidence that last call has been announced at industrial party.

    ASCE’s 2017 Infrastructure Report Card | GPA: D+

    https://www.infrastructurereportcard.org/

    clog is like every desperate lonely, horny, alcohol and testosterone fueled guy at last call – the girls are all beautiful…. until they turn on the lights.

    https://www.youtube.com/watch?v=XVmYG6OXwtg

  21. Cloggie on Sat, 13th May 2017 3:28 pm 

    Housing prices here near alltime high again, prices in big cities absolutely through the roof:

    https://economics.rabobank.com/Global/Publicatie%20afbeeldingen/2016/05%20Mei/DHMQ-May2016/fig22.png

    The collapse is progressing handsomly.lol
    More of it!

  22. Cloggie on Sat, 13th May 2017 3:51 pm 

    That was not “some individual”, that was a complete doomer movement, TalmudTurd. And what a titanic failure that was. “The fate of industrial societies”, no less.lol

    And now nihilistic doomer junkies like you are pinning their hopes on climate change.

    I’m almost feeling sorry for you. Almost.
    Already a date set for your ritual harakiri?

  23. GregT on Sat, 13th May 2017 4:11 pm 

    “Housing prices here near alltime high again, prices in big cities absolutely through the roof:”

    You’d think that people would learn, but apparently not.

  24. Cloggie on Sat, 13th May 2017 4:22 pm 

    These are the facts today. Tomorrow they will be different, nobody knows, not even the collapseniks.

  25. Twocats on Sat, 13th May 2017 5:17 pm 

    GregT yep that was classic idiot there.

    First of the hehe ecb is pumping billions every month to save an already dead economic system that is the euro zone.

    2ND if clogs keeps his high house prices then we see peak oil round 2 (unconventional) as soon as 2018, 2022 by the latest with billions of people “priced out” of the party. If we have another cilizational step down and po2 gets pushed out the clog heads of the he world will crow about po2 delay.

  26. Twocats on Sat, 13th May 2017 5:18 pm 

    *first of all

  27. Twocats on Sat, 13th May 2017 5:20 pm 

    This shit isn’t in the future it’s been ongoing since 2002 in particular when production growth rates slowed. If you can’t see these things it’s only because you don’t want to see them.

  28. onlooker on Sat, 13th May 2017 5:24 pm 

    Yep, Greg bubbles and ponzi schemes exist also because they’re are idiots out there

  29. Cloggie on Sat, 13th May 2017 5:39 pm 

    Portugal won Eurovision Song Contest with NOT singing in English.lol

    Next year in Lissabon, so no political shit and Russia can join again.

  30. Davy on Sat, 13th May 2017 5:40 pm 

    Onlooker, bubbles are systematic now. Globalism is now based on bubbles. It is not individuals so much as all of us. We are now dependent on them and they are vital. Tell me how your going to stop them? You are not until the game ends.

  31. Cloggie on Sat, 13th May 2017 5:53 pm 

    Greg, twocats and onlooker… did you learn anything from the peak oil debacle? Perhaps time for some introspection and modesty rather than dogmatically clinging on to obsolete 2005 visions.

  32. onlooker on Sat, 13th May 2017 5:55 pm 

    Very well said Davy. I quite agree. You could say our whole industrial civilization and its relentless growth being unsustainable and ultimately subject to natural correction can be liken to a bubble that was bound to burst

  33. onlooker on Sat, 13th May 2017 6:06 pm 

    Clog, you and others can argue till the cows come home about how doomerish some of us are. But you don’t seem to comprehend, we and our activities are not sustainable. The Earth is giving us ample clues. The consequences of oil depletion is fast becoming a distant second to environmental consequences spurred by us. Put on your environmental hat and forget the situation with oil, it would broaden your outlook

  34. onlooker on Sat, 13th May 2017 6:14 pm 

    I think I need to post this again. I am going to become AP 2.0, focusing on environmental doom because doom it is.

    http://www.scotsman.com/news/environmen … -1-4444641
    Oceans ‘on verge of mass extinction event’, scientists warn

  35. makati1 on Sat, 13th May 2017 6:30 pm 

    Peak oil or peak anything is just a distraction from the real end of civilization: Extinction. Mother Nature is prepping her most lethal weapons and we have no clue when or where they will be used next. But she is giving us hints. Ebola, Haiyan, Methane leaks, droughts, erratic weather, etc.

    The uneducated are blissfully unaware of the danger and the governments of the West want to keep it that way. BAU is connected to so many life support machines that you cannot get a true reading of the situation. Chaos is the word best used to describe the current world situation.

    You cannot just say: “The internet only makes it seem chaotic because we have access to more info.” Bullshit! There was a time when news was really news and not propaganda. In those times, we were informed about the world and it was not like today. Not even close. But the young have no personal experience with the past so they are gullible and suck down the government Koolaid without question. Old timers know different. We are inching closer and closer to extinction by our own actions. So be it.

  36. onlooker on Sun, 14th May 2017 1:47 am 

    Yep, extinction folks. https://www.scientificamerican.com/article/phytoplankton-population/
    Phytoplankton Population Drops 40 Percent Since 1950
    The tiny organisms, known as phytoplankton, also gobble up carbon dioxide to produce half the world’s oxygen output—equaling that of trees and plants on land.
    OUR EXTINCTION!

  37. Cloggie on Sun, 14th May 2017 3:31 am 

    Clog, you and others can argue till the cows come home about how doomerish some of us are. But you don’t seem to comprehend, we and our activities are not sustainable.

    You don’t seem to comprehend that I realize very well that our activities are not sustainable, a conviction I have held for more than 40 years. I dedicated my university study to it and a couple of years of working in the field after my study. And I have spend hundreds if not thousands of hours over the past 5 years maintaining a blog on the subject:

    https://deepresource.wordpress.com/

    What separates me from many others here is my aversion against “hand wringing”, hyping doom, excessive “all is lost attitude”, humans are “cancer monkeys”. My attitude is constructive without escapism (Kogi, Chief Seattle). Europaen scientific/technological.

    You identify a problem, next identify an approach towards a solution and next you implement it. It has nothing to do with “techno-optimism”, but with doing the best you can and if in hindsight it turns out to be not enough…. well too bad then. Everything in this universe has a beginning and an end. It has bee nice knowing you.

    Do I instinctively feel the end of life on this planet coming, including human life?

    No.

    Could be wrong though.

  38. onlooker on Sun, 14th May 2017 3:41 am 

    Thanks Clog, I do appreciate what you just said

  39. onlooker on Sun, 14th May 2017 3:59 am 

    Look finding solutions if they’re are is obviously what in the end all our talks should amount to. I do not know if anything can now stop the breakdown of our civilization and of the capacity of the Earth to support most life on it. I do know that any plan for solutions must be wholly honest about the current situation. That is what I have tried to do. To contribute to showing the full extent of our plight. I believe that any solution or solutions if they exist must involve a drastic curtailing of consumerism and a substantial decrease in population. Of course the Devil is in the details. So that is my vantage point.
    Chat Conversation End
    Type a message…

  40. Davy on Sun, 14th May 2017 6:30 am 

    “What separates me from many others here is my aversion against “hand wringing”, hyping doom, excessive “all is lost attitude”, humans are “cancer monkeys”. My attitude is constructive without escapism (Kogi, Chief Seattle). Europaen scientific/technological.”
    You just do the same but drop the doom and add the optimism. Come on Clog, you can label us but you are very easy to label and do the same thing with the presentation of your optimism. Quit acting high and mighty in the shadow of the truth.

    “You identify a problem, next identify an approach towards a solution and next you implement it. It has nothing to do with “techno-optimism”, but with doing the best you can”
    Clog it is called wisdom. It’s about qualities of wisdom , actions through wisdom, and principals of wisdom built up over time. Techno optimism problem is it is always “Yes” and “More”. It is always action without the pause. It is based on principals that are increasingly being shown to be the reason we are in this existential predicament. I am not saying all techno optimism must be dispensed with. I am saying techno optimism is not wisdom. Today knowledge and technical power is considered wise and this is the problem

  41. onlooker on Sun, 14th May 2017 6:52 am 

    Building on what Davy said-techno optimism continues to lead us along this misbegotten and waylaid path. It inherently disavows limits. The wisdom lies in first demonstrating humility before this unnegotiable truth and then acting accordingly. Having done so then gives us the sturdy intellectual/ideological foundation to attain sustainable communities. The one good thing about the extreme collapse that almost certainly is coming is that it will return our population and modes of living into a sustainable framework and it will be up to future humans to maintain it as such

  42. Apneaman on Sun, 14th May 2017 10:24 am 

    hair clog “without escapism”? Gimme a fucking break pal, you are the escape artist extraordinaire. You are the Houdini of reality escapism.

    – climate change is a hoax or overblown (depending on your mood)

    – peak oil is not real

    – A eurotard renaissance is gonna happen any day

    – Alex Jones is a your favorite “intellectual”

    – It’s all ________ & _______ & ________ fault

    – Through some unexplained magic, you get a slice of the credit for all dead white individuals accomplishments by default because you share the same geography and skin colour.

    – you try and pass yourself off as a refined, cultured & educated euro superior (Ba ha – see Alex Jones)

    – etc, etc, etc

  43. Cloggie on Sun, 14th May 2017 10:49 am 

    climate change is a hoax or overblown (depending on your mood)

    Never said that. What I do say is that it is perhaps overblown, that we should move away from fossil and pray for the best.

    peak oil is not real

    More BS. I said peak oil is real and at the same time irrelevant because we have a renewable alternative that by 2050 probably will work in Europe.

    A eurotard renaissance is gonna happen any day

    Never said that. The (demographic) situation of the Europeans is dire and the repair will take decades. I gave a grand strategy: EU turning to Moscow and help our fellow Europeans in the US escape from Washington and park them in a European global culture circle.

    Alex Jones is a your favorite “intellectual”

    Never said that either. He absolutely is not. I did not frequent his site after the election, but I recognized very well that he is the mouth piece of the US populists and that he played an important role in defeating your pets in November 2016 [snicker]. And I appreciate his role in 9/11-trutherism. If he rants again about “Natzis” it is roll-eyes again, like with almost every North-American.

    etc.

    You see, wrong on all counts.

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