NOw is a good time for OPEC to cut production, given that half of rigs and shales are bankrupt and will never come back. Had they cut productions before, those companies would still be alive and searching for oil to compensate for the cut. When Saudi and OPEC cut production now, the world will feel the hunger for oil.
the reason why they didn't cut production before is because many companies were still in operation; they could still search for oil patches. Now that half is bankrupt; they are out of commission and the world will feel the hunger for oil when they cut.
I can almost taste it; they will cut production to the point where the supply will grossly be under demand for several weeks. This will completely deplete the inventories, then they will get their $100/barrel again. OPEC isn't stupid to continue selling oil for $50/barrel when they can get $100.
why do you think every country is hoarding and increasing inventories? The chinese ran out of space and they are storing in tankers, floating in the oceans. It's every country way to buffer the sudden price surge; the bigger the inventories the better and longer the buffer. Why do you think Iran is free to sell oil now? To help the buffer in case OPEC decides to cut production in a drastic way.
you know it is comming! OpEC first lowered the oil price, sacrificing selling cheap oil for almost 2 years to BK half of american companies. Then comes the pain when they shut off production completely to bring back the $200/barrel price.
our friend, the Canadians, have been supplying us cheap oil so we can manipulate the market. But our friend found a hurdle, said it was "wild fire" that burned their oil fields. Rebounce will be fierce!
OPEC doesn't want to sell oil this cheap. The only country that wants it this cheap is the US who has been manipulating the market, but at the same time we are bankrupting our own oil companies. So what is gonna happen when OPEC cuts production and half of the companies are bankrupt? I think we may have $200/barrel soon. Opec is gonna make us pay.
Since the glut the US increase inventory from 380 mill to 540 mill barrel, that is a surplus of 160 mil barrel, divide that by 20 mill barrels/day consumption. What you have is 8 days of consumptions; that's right folks our surplus in inventory is good for ONE week! China consumption rate is 11 milion/day. All the surplus that we are talking about is good for a couple of weeks at most.
If OPEC or Saudi wants to sell oil again at $110-200/barrel, all they have to do is shut everything down for a week, then the world will go into a panic and start buying oil for $500/barrel.
Since the oil glut the US increase inventory from 380 mil barrels to about 540 mil barrels, that's 160 mil barrels surplus since this oil glut started in 2014. 160/20= 8 days folks!!! This is your surplus, good for a week!!!
If the Saudi or OPEC wants to really hurt the US and sell oil again for $110-200/barrel, all they have to do is cut everything off, and all the surplus will be gone within a week!!!! Why not do it? especially half of shales and rigs are out of commission.
Yup, he said the glut is over, and we just have to consume the inventories which shouldn't take long at all. By the end of 2016, we will back to $100/barrel again.
Saudi is signalling that their reservoirs are running dry: 1) diversifying their business from oil. 2) capitalizing on their oil reservoirs by going IPO but no one really knows how much oil is left. 3) increase drilling to look for more oil reservoirs.
3 clues that suggest their reservoirs are drying up: 1) they are looking to capitalize on their reservoirs by going IPO but the only question is how much oil is left? 2) Saudi upped their drilling for new reservoirs suggests that their current or old reservoirs may be drying up. 3) Diversify their businesses from oil, even planning on spending $100 billion on solar projects, in preparation for future where oil will not be their sole revenue.
Vanishing storage ! Currently what we are seeing is UNDER production attributed by Canada fire, political uncertainties in Lybia and Nigeria, Venezuela electrical shortage, and shales/rigs out of commision in the US. It will take several months for the storage to vanish, then the world will see the true shortage of oil.
the next announcement that will cause a major rally is vanishing surplus and still under produced.
unless electric chargers are ubiquitously everywhere like gas stations, and assuming they can charge my electric car in 10 minutes or less, I am not driving electric.
Electric cars have worse carbon foot print, where is the electricity coming from ? Coal burning power plants!!!!
the western (particularly the US) has an a agenda, and they paint the media which ever they want the world to think. Given that they lifted sanction off Iran and allowing them to dump oil into the market, and the US just made deals with Iran to provide them 100 planes, certainly suggests that oil price is a big problem for the US. The scheme is to get it lower but wait until the rest of the world finds out. The Chinese has already found out and they are buying and loading up on oil.