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Page added on April 24, 2016
Crude power: The oil game uncovered
In an attempt to tackle the global oil crisis, OPEC and non-OPEC oil producers held an extraordinary oil summit in Doha, Qatar’s capital, last week.
With the oil price still low and the market heavily oversupplied, 20 oil and energy ministers were trying to find a consensus on a way forward. But they failed to do so, and the summit turned out to be more about regional rivalries than about finding a solution to low oil prices.
Mohammed Bin Saleh al-Sada, the Qatari energy minister, said after the meeting:
“The meeting concluded that we all need time for further consultation …”
In the end, Saudi Arabia wasn’t going to agree to a freeze in production without the participation of Iran, meaning a deal was almost impossible from the outset.
So, with nothing changing in Doha, the oversupply will most likely continue and oil prices will unlikely recover.
Why did the Doha meeting fail? Who are the major players in the game of oil?
Counting the Cost takes a look at where the global oil industry stands right now – from Doha and Saudi Arabia to Oklahoma and to Azerbaijan. We talk to Spencer Welch, Oil Markets and Downstream, IHS, about the game of oil, the Doha meeting and the issues behind it.
Also on Counting the Cost, we examine the Google anti-trust charges, the smartphone business and the undeniable truth that these devices are starting to run our lives. Georgios Petropoulos from Bruegel think-tank discusses Google’s position in the market and David Richards, the CEO and cofounder of WANDISCO, talks about the mobile revolution and the future of the smartphone business.
Plus, the hunt for better trade routes: Arctic ice reached a record-low for a second consecutive winter, so China is looking to exploit the Northwest Passage, the fabled shortcut through the Arctic Circle. Along with a new economic corridor through Pakistan, it’s the Silk Road 21st-century style.
23 Comments on "Crude power: The oil game uncovered"
makati1 on Sun, 24th Apr 2016 7:51 pm
It is a race to the bottom for everyone.
Go Speed Racer on Sun, 24th Apr 2016 8:12 pm
Finally a woman on the $20 bill. Famous and made a difference in all of our lives. A pillar of what America stands for. Link…
https://www.google.com/search?client=safari&channel=iphone_bm&site=webhp&tbm=isch&source=hp&ei=mG0dV6uyAuqkjgS6066wBw&q=taylor+swift+20+bill&oq=taylor+swift+20+bill&gs_l=mobile-gws-hp.12…1704.8019.0.10003.21.21.0.1.1.0.414.3808.0j19j1j0j1.21.0….0…1.1.64.mobile-gws-hp..0.18.3166.3.bqal2G30LUE#imgrc=Harnlq5h53myJM%3A
Plantagenet on Sun, 24th Apr 2016 8:27 pm
Not just a woman but a particular woman—Harriet Tubman.
Tubman carried a gun at all times for self-protection—i wonder if she was nominated by the NRA?
Davy on Sun, 24th Apr 2016 8:31 pm
Speeder, don’t you think it might help the value of the $20 bill if there was a hot woman with significant cleavage. Breasts would increase the implicit value. What would make it even more valuable is if you could turn the bill over and see the back side of a nice ass. All this is heavily dependent on a hot candidate. How about Raquel Welsh in her hay day! The 70’s is far enough back to be history.
https://www.youtube.com/watch?v=HR-oR9cEyYY
Truth Has A Liberal Bias on Sun, 24th Apr 2016 9:53 pm
They should put a picture of a retard on all US bills. Fat people too. Or maybe an angry old white guy yelling at a tv. That’s what you all are. Idiots.
Boat on Sun, 24th Apr 2016 10:11 pm
Hillary will be the future bill with Obama. The diversity bill.
Boat on Sun, 24th Apr 2016 10:22 pm
The Saudi and Iran have stated their positions on oil production for months. Why don’t the other nations cut production without them, or freeze? They could easily cut production by 2 mb/d and poof, $100 oil.
makati1 on Sun, 24th Apr 2016 11:00 pm
Yes, why doesn’t the uS cut production? Oh, that’s right, they are. It’s called bankruptcy in America.
makati1 on Sun, 24th Apr 2016 11:01 pm
Truth, you have a great idea there. So representative of the majority of Americans today.
Go Speed Racer on Mon, 25th Apr 2016 1:46 am
Explanatory video about Aunt Jemima:
https://m.youtube.com/watch?v=1yU3i7F_mmU
We need Trump for President. He would say, no ugly old raisin on the bill, has to be a hottie.
Go Speed Racer on Mon, 25th Apr 2016 1:56 am
The new 20 bill does not say ‘In God We Trust’. Instead it says
”Take dis money or I pop a cap into yo ass muttafutta’
sinnycool on Mon, 25th Apr 2016 5:12 am
It’s amazing really: governments clamouring and cheering for an entire industry to collude to force prices up.
We are so screwed.
rockman on Mon, 25th Apr 2016 6:38 am
cool – Not the entire industry…just the oil cartel. No companies in the US oil patch are involved in the discussion: our companies are still producing as much as possible. And though the count is way down we still have around 1/3 of all the rigs drilling on the planet rigs today and more wells still being drilled in the US then in the entire Middle East.
Colluding? But isn’t that the function of any cartel? LOL.
shortonoil on Mon, 25th Apr 2016 7:45 am
“The Saudi and Iran have stated their positions on oil production for months. Why don’t the other nations cut production without them, or freeze? They could easily cut production by 2 mb/d and poof, $100 oil.”
Recently the Saudi oil minister stated that it would take a cut of 5 mb/d to relieve the price pressure. We have stated for some time that it would take a 4.5 mb/d cut to bring the price back to this curve:
http://www.thehillsgroup.org/depletion2_022.htm
Anything above that curve generates enough demand destruction to bring it back down to the curve. $100 oil is out of the question. Not understanding the energy dynamics now controlling the petroleum industry is like throwing darts while blind folded in a darkened room. Its not a good idea. One of those darts is more likely to hit something, or someone other than the bulls eye!
http://www.thehillsgroup.org/
joe on Mon, 25th Apr 2016 9:23 am
Boat, there is a flaw in what you wrote. They could cut, but cutting is not the issue. There is an old card game called begger my neighbour, its a game where you try to make your opponent end with nothing, and is a type of protectionism.
Right now this is oil begger my neighbour, except Iran has by far the superior hand. They have most of Iraq and all Iran, versus a loss making Saudi.
That Aramco is about to be spun off and part privatised (a return of Standard Oil?) should tell any observer everything they need to know.
rockman on Mon, 25th Apr 2016 11:33 am
Joe – IMHO nothing the KSA/ARAMCO will ever be controlled by private hands. They might offer some revenue interest in ARAMCO but they are going to have to provide a SECURED revenue stream from that INVESTMENT for any significant amount of sales. IOW would you invest $10k in ARAMCO if you weren’t certain of some acceptable ROR?
Folks talk about owning a piece of ARAMCO and there’s no information what so ever what that ownership might look like, what it will cost or the anticipated return to the buyers. Not even a single hint and folks are assuming what will cone to pass.
geopressure on Mon, 25th Apr 2016 11:47 am
I think people are assuming that the shareholders of the 5% of the company that is sold will receive the same size dividend that the Kingdom of Saudi Arabia receives on their 95% of outstanding shares…
People just do not know what exactly will be IPO’ed… Upstream Assets? Downstream Assets? Both?
Before pricing an IPO, a lot more information will have to be made public…
rockman on Mon, 25th Apr 2016 12:22 pm
geo – And a few problems there. First, why assume ARAMCO will pay any dividends? There are many US corporations that don’t pay dividends. And even the ones that do often pay just a small amount that hardly justifies the investment. Second, folks are assuming ARAMCO will actually own the oil in the ground. A very poor assumption of their part IMHO. The oil in the KSA belongs to the govt of the KSA…just as all the oil/NG/coal produced from govt lands (including he DW GOM) belongs to the federal govt. Our govt has production sharing contracts with the producers. Just as ARAMCO has with the KSA govt. How much of that production will belong to ARAMCO is not known.
Again: many folks are making huge assumptions about matters that haven’t even been discussed in general by the KSA govt. It’s all completely unfounded speculation at this point.
Davy on Mon, 25th Apr 2016 12:33 pm
“China is hoeing fuel at the fastest pace on record”
http://www.zerohedge.com/news/2016-04-25/one-chart-shows-where-worlds-record-surplus-oil-has-gone
“In the aftermath of China’s gargantuan, record new loan injection in Q1, which saw a whopping $1 trillion in new bank and shadow loans created in the first three months of the year, many were wondering where much of this newly created cash was ending up.”
We now know where most of it went: soaring imports of crude oil.
geopressure on Mon, 25th Apr 2016 12:58 pm
Hmmm…
That’s getting over my head, I have been thinking that Aramco owns the reserves – all the reserves in Saudi Arabia…
I suppose that if they were to spin it off, then the government might decided to hold the minerals rights (or a percentage of reserves & production)…
It could get complicated really quick…
I’ve been assuming that dividends would be necessary in order for the KSA to receive revenues, but using your notion, above, that is not necessarily the case…
Yeah, complicated…
rockman on Mon, 25th Apr 2016 3:38 pm
geo – Exactly. I actually don’t know what I’m talking about. But neither dies anyone else from what I can gleam. At least I know what I don’t know. LOL.
Another uncertainty: the KSA produces over 9 mm bopd but exports less than 7.5 mm bopd. So does the KSA govt pay ARAMCO for the oil it consumes internally? What about the 600k bopd refinery the KSA owns 50/50 with China: does it buy that 200+ million bbls of oil per year from the govt…from ARAMCO?
“A Calgary based oil trader wishing to remain anonymous recently went on record to say that Irving Oil has “fixed the 299,235t Kamakshi Prem to ship crude on January 21 from Ras Tanura, Saudi Arabia to its 300,000 b/d refinery in St. John, NB in Canada. Canada’s largest refinery, the Irving Oil New Brunswick facility, imports oil from Saudi Arabia. Why does Canada import oil at all, and if we must why from Middle Eastern nations like Saudi Arabia?” So who are the Canadians buying that oil from: ARAMCO or the KSA govt?
And now news from the Gulf Coast: Saudi Aramco, the state oil company of OPEC’s most powerful player, recently announced plans to take full control of the sprawling Port Arthur, Texas refinery. The Gulf Coast facility is the largest refinery in the U.S. and can process 600,000 barrels of oil a day. It will give the Saudis complete control over the refinery. They could then likely bring more of their own crude oil into the U.S. for refining and selling in the North American market.
Boat on Mon, 25th Apr 2016 6:13 pm
short,
“Recently the Saudi oil minister stated that it would take a cut of 5 mb/d to relieve the price pressure. We have stated for some time that it would take a 4.5 mb/d cut to bring the price back to this curve:”
There is not 5mbd going into storage. If projections are close and demand is 1.2 growth why would 4-5 mbpd need to be cut to match demand. The math doesn’t add up.
Kenz300 on Wed, 27th Apr 2016 7:47 am
New Documents Show Oil Industry Even More Evil Than We Thought
http://www.huffingtonpost.com/entry/oil-cover-up-climate_us_570e98bbe4b0ffa5937df6ce
Climate Change is real….. we will all be impacted by it.
Oil Giants Spend $115 Million A Year To Oppose Climate Policy
http://www.huffingtonpost.com/entry/oil-companies-climate-policy_us_570bb841e4b0142232496d97
The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles
http://www.huffingtonpost.com/entry/koch-electric-vehicles_us_56c4d63ce4b0b40245c8cbf6
Inside the Koch Brothers’ Toxic Empire | Rolling Stone
http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924?page=2