Saudi Arabia’s Fake Surrender: Why The Oil Price War Is Still On

What do you do when everyone is bugging you to do something, but you don’t want to do it? The simple answer is that you make it look like you are doing something in order to get others off your back.

We should keep all this in mind when evaluating the latest reports that OPEC has agreed to cuts. Bloomberg tells us right up front that OPEC has merely agreed to the “outline of a deal” that will be taken up at its November meeting. Continue reading

Exclusive: Iran wants euro payment for new and outstanding oil sales – source

 

 

Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its oil in euros and is billing new crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month’s sanctions relief.

A source at state-owned National Iranian Oil Co (NIOC) told Reuters that Iran will charge in euros for its recently signed oil contracts with firms including French oil and gas major Total, Spanish refiner Cepsa and Litasco, the trading arm of Russia’s Lukoil. Continue reading

Plunging prices could force a third of U.S. oil firms into bankruptcy

Saudi Arabia’s economic war on America’s oil industry will soon start to show its effect. Declining prices mean less profit. Less profit means operating costs, mainly wages, are unsustainable. Unustainable operating costs mean layoffs and bankruptcies. This leads to collapse of the oil industry.

 

Drillers from Houston to Riyadh won’t quit pumping despite the oil glut.

 

Three major investment banks — Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc.   — now expect the price of oil to crash through the $30 threshold and into $20 territory in short order as a result of China’s slowdown, the U.S. dollar’s appreciation and the fact that drillers from Houston to Riyadh won’t quit pumping despite the oil glut. Continue reading

US Shale Declining And OPEC Still Climbing

Essentially, OPEC has killed off the U.S. shale industry, which was predicted last year. See the OPEC category for further articles on Saudi Arabia’s economic warfare scheme against the United States.

 

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There is new data out today. The EIA published their International Petroleum Statistics yesterday. The EIA also published their Drilling Productivity Report which gave their expected shale oil and gas production through September. Then this morning OPEC published their Monthly Oil Marketing Report with OPEC crude only production numbers through July.

First the Drilling Productivity Report. Of course most of the Drilling Productivity Report is projection, not history. And that projection goes through September 2015.

The EIA has the Bakken peaking in December and declining 107 thousand barrels per day since that point. A secondary peak was reached in April and declining steadily since then. Continue reading

California oil spill: Aerial images reveal devastation after over 100,000 gallons of oil spills into ocean

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From the air the oil shimmers, dark and sinister. On the ground, it is sticky and foul.

A series of images released by environmental activists have revealed the true crisis confronting a stretch of California coastline after more than 100,000 gallons of oil were leaked into the ocean.

As Governor Jerry Brown issued an emergency proclamation declared to speed the dedication of resources to the area, clean-up teams north of Santa Barbara embarked on a third day of efforts to remove patches of oil.

Continue reading

Plains All American Pipeline Ruptures; 21,000 Barrel 4-Mile Oil Slick On Santa Barbara Beaches

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Emergency officials and Exxon Mobil were responding Tuesday afternoon to a ruptured pipeline that was leaking crude oil into the ocean off the Santa Barbara County coast, authorities said. The Santa Barbara County office of emergency management has identified the responsible party as Plains All American Pipeline.

As The LA Times reports, by 3:45 p.m., the leak had left a 21,000 barrel four-mile-long sheen of oil extending about 50 yards into the waters along Refugio State Beach in Goleta, said U.S. Coast Guard Petty Officer Andrea Anderson. Continue reading

Oil prices: OPEC plan to strangle US suppliers working

Demand for oil will strengthen this year, according to OPEC, as the cartel said its strategy of pumping oil into the market to squeeze out US producers was taking effect.

The Organisation of the Petroleum Exporting Countries, which pumps a third of the world’s oil, believes demand will average 29.27m barrels per day (bpd) in 2015, representing an increase of 80,000 bpd from its previous prediction.

Continue reading

Russia opens way to missile deliveries to Iran, starts oil-for-goods swap

Obama’s ‘deal’ with Iran, giving them everything it wanted without restriction, is driving Israel into a corner where it will either have to strike or be struck. Now that the S-300 air defenses for Iran will be rolling in, the window of opportunity for successful first-strike capability is closing fast.

 

(Reuters) – Russia paved the way on Monday for missile system deliveries to Iran and started an oil-for-goods swap, signaling that Moscow may have a head-start in the race to benefit from an eventual lifting of sanctions on Tehran.

The moves come after world powers, including Russia, reached an interim deal with Iran this month on curbing its nuclear program.

The Kremlin said President Vladimir Putin signed a decree ending a self-imposed ban on delivering the S-300 anti-missile rocket system to Iran, removing a major irritant between the two after Moscow canceled a corresponding contract in 2010 under pressure from the West. Continue reading

This New Project Changes The Global Oil Market

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We saw one of the most significant shifts in a long while for energy markets last week. With a key pipeline opening that will radically change global flows of crude oil.

The project in question is the China-Myanmar oil pipeline. Which Chinese state media said on Thursday has now opened for test runs. Continue reading

Russia Just Pulled Itself Out Of The Petrodollar

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), we wrote “How The Petrodollar Quietly Died, And Nobody Noticed“, because for the first time in almost two decades, energy-exporting countries would pull their “petrodollars” out of world markets in 2015.

We added that in 2014 “the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”

The problem was compounded by its own positive feedback loop: as the last few weeks vividly demonstrated, plunging oil would lead to a further liquidation in foreign  reserves for the oil exporters who rushed to preserve their currencies, leading to even greater drops in oil as the viable producers rushed to pump out as much crude out of the ground as possible in a scramble to put the weakest producers out of business, and to crush marginal production. Call it Game Theory gone mad and on steroids. Continue reading

China reaps harvest from Russia sanctions

China is gaining an edge in energy deals with Russia as Moscow faces sanctions pressure from the conflict in Ukraine.

The latest energy accords announced in Beijing on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit suggest that China is increasing its access to Russian resources while resisting demands for more favorable financial terms.

At a signing ceremony on November 9, Presidents Xi Jinping and Vladimir Putin sealed a memorandum of understanding for a second Siberian gas pipeline on a western route that Russia has promoted unsuccessfully for years.

The preliminary commitment to the project known as the Altai pipeline, named for a remote Russian border region, follows an agreement in May on an eastern Siberian gas line to supply China’s coastal cities and industrial northeast. Continue reading

U.S. Returns Fire in Saudi Arabia’s Oil War

One day after Saudi Arabia declared war on U.S. oil producers by lowering prices in an attempt to dump cheap crude in the United States (US) market, the White House and private oil companies responded.  White House spokesman Josh Earnest said that the U.S. is monitoring the global oil supply and demand situation but has no comment on whether it might look at replenishing the Strategic Petroleum Reserve. Then, later in the day, the Wall Street Journal reported that BP is going to export ultra-light crude without the permission of the U.S. government in a move that not only starts to breakdown the US export ban, but also is a direct challenge to OPEC and other producers for market share.  Both of these developments temporarily gave support to the petroleum complex, but it still was not enough to overcome the perception of overwhelming supply and Bank of Japan Gov. Haruhiko Kuroda’ s prescription against the disease deflation. Continue reading

Oil price will fall to $70 US a barrel in 2015, Goldman Sachs says

World is producing more than it needs, thanks to boom in shale oil, bank says

One of the world’s leading investment banks says the benchmark price of North American oil is going to fall even further, to $70 US a barrel by next spring.

Investment bank Goldman Sachs slashed its forecast late Sunday night for both West Texas Intermediate (known as WTI) and Brent crude — the two most common types of oil used and sold in North America and Europe.

Goldman Sachs says WTI will go for $75 a barrel in the first three months of 2015. Brent, meanwhile, will change hands at $85 a barrel. Both forecasts are down $15 from what the bank was last expecting. And both are forecast to slip even lower in the second quarter — historically a seasonally low time for oil prices — before rebounding a little in the summer of 2015. Continue reading

Islamic State: US-led air strikes on militant group’s makeshift oil refineries ‘not a real target’, monitoring group says

Truthfully speaking, as was al Qaeda, ISIS was created by the US government and is now the latest cover for a war on Syria that Obama previously backed down from last year when Putin called his bluff. He fumbled and now this is his second attempt. What’s being bombed at the moment in Syria is the infrastructure in order to cripple the nation.

ISIS is not sophisticated enough, nor ever was, to run oil refineries. This is also why you see Russia threatening retaliation against America for its bombing campaign in Syria. This is war under the radar with a terrorist group used as a ruse that almost no one has picked up on. Whether all the targets are real or not is anyone’s call at the moment.

This isn’t about ISIS.

Air strikes believed to have been carried out by US-led forces have hit three makeshift oil refineries in Syria’s Raqqa province as part of an assault to weaken Islamic State (IS) militants, a monitoring group said.

The Britain-based Syrian Observatory for Human Rights said the attacks occurred shortly after midnight on Sunday (local time), adding that they also hit a plastic factory.

Islamic State fighters have control over oil produced in eastern Syria and have set up small, makeshift refineries to distil the crude into fuel, one of their main sources of income. Continue reading

China steps up speed of oil stockpiling as tensions mount in Asia

Beijing has ordered an “unprecedented” build up of oil reserves as West prepares for possible oil sanctions against Russia

China is stockpiling oil for its strategic petroleum reserve at a record pace, intervening on a scale large enough to send a powerful pulse through the world crude market. Continue reading