OPEC Threatens To Kill U.S. Shale

 

The Organization of Petroleum Exporting Countries will once again become a nemesis for U.S. shale if the U.S. Congress passes a bill dubbed NOPEC, or No Oil Producing and Exporting Cartels Act, Bloomberg reported this week, citing sources present at a meeting between a senior OPEC official and U.S. bankers.

The oil minister of the UAE, Suhail al-Mazrouei, reportedly told lenders at the meeting that if the bill was made into law that made OPEC members liable to U.S. anti-cartel legislation, the group, which is to all intents and purposes indeed a cartel, would break up and every member would boost production to its maximum. Continue reading

The Oil Powerhouses Replacing OPEC

Offshore rig

 

Three countries currently account for close to 40 percent of global crude oil production and only one of these countries is a member of the Organization of Petroleum Exporting Countries. The three are Russia, the United States, and Saudi Arabia and as their clout over oil markets increases with rising production rates, OPEC’s is set to decline, at least temporarily. Continue reading

OPEC’s Clash With U.S. Oil Is Nearing Its Day of Reckoning

 

  • Strategy of cartel has helped to deplete half surplus stocks
  • Bolstering prices is emboldening American shale-oil drillers

The clash between OPEC and America’s oil industry is reaching a day of reckoning.

The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets. Continue reading

Desperate Saudi Arabia Offers To Cut Production By 500,000 Barrels

Bringing Iran into the fray out of panic will also give the Persian nation the recognition it wants in the oil and gas industry, allowing for it to extend its grip on the Middle East on its economic front. Furthermore, having an increased say within the OPEC cartel will give it more global clout and give it a tool to wage economic warfare.

 

Saudi Arabia’s oil policy, unveiled just under two years ago at the November 2014 OPEC meeting where it effectively splintered the OPEC cartel by announcing it would produce excess quantities of oil in hope of putting shale and other high-cost producers out of business, has backfired spectacularly. OPEC has failed to crush the U.S. shale industry, which as a result of increasing efficiencies and debt-for-equity exchanges has seen its all in production costs tumble. This has made far cheaper oil prices profitable (especially with the addition of hedges), not to mention Wall Street’s ravenous desire to buy any debt paper that offers even a modest yield, allowing U.S. oil producers to delay or outright avoid bankruptcy. Continue reading

Saudis Aim To Create The World’s Biggest Oil Fleet

Saudi Arabia aims to create the world’s largest fleet of oil tankers following the establishment of a new US $1.5 billion investment fund by Arab Petroleum Investment Corporation, (Apicorp), and National Shipping Corporation of Saudi Arabia (Bahri).

Under the Apicorp Bahri Oil Shipping Fund venture announced yesterday, fifteen very large crude carriers (VLCCs) would be added to the shipper’s expected fleet of nearly fifty such vessels over the next two years. Bahri currently owns 36 VLCCs and plans to add ten more by 2018. Continue reading

Putin’s Decade-Old Dream Realized as Russia to Price Its Own Oil

This is the beginning of the removal of the U.S. Dollar (and America) from the global system.

In the future, the price of precious metals such as gold and silver will be set by both China and Russia in their own markets, then expand globally as they eventually aim to take the power of setting global standards away from America. The U.S. keeps prices artificially low to mask the true state of its respective economy. Oil seems to be the first step in taking the U.S. Dollar out of how the commodity is priced.

Without the Petrodollar, there is no U.S. Dollar. Without the U.S. Dollar being used globally, there is no America as we know it today. it will become a third world nation.

 

Russian President Vladimir Putin is on the verge of realizing a decade-old dream: Russian oil priced in Russia.

The nation’s largest commodity exchange, whose chairman is Putin ally Igor Sechin, is courting international oil traders to join its emerging futures market. The goal is to increase revenue from Urals crude by disconnecting the price-setting mechanism from the world’s most-used Brent oil benchmark. Another aim is tomove away from quoting petroleum in U.S. dollars. 

If Russia is going to attract international participation in Russian-based pricing, the Kremlin will need to persuade traders it’s not simply trying to push prices up, some energy analysts said. The government is dependent on oil revenue to fund its budgets. Continue reading

Oil-Rich Nations Are Selling Off Their Petrodollar Assets at Record Pace

In the heady days of the commodity boom, oil-rich nations accumulated billions of dollars in reserves they invested in U.S. debt and other securities. They also occasionally bought trophy assets, such as Manhattan skyscrapers, luxury homes in London or Paris Saint-Germain Football Club.

Now that oil prices have dropped by half to $50 a barrel, Saudi Arabia and other commodity-rich nations are fast drawing down those “petrodollar” reserves. Some nations, such as Angola, are burning through their savings at a record pace, removing a source of liquidity from global markets.

Continue reading

OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says

As mentioned in a previous post, the economic war on American shale oil is in motion — and seemingly not far away from achieving its goal.

 

OPEC policy on crude production will ensure a crash in the U.S. shale industry, a Russian oil tycoon said.

The Organization of Petroleum Exporting Countries kept output targets unchanged at a meeting in Vienna today even after this year’s slump in the oil price caused by surging supply from U.S shale fields.

American producers risk becoming victims of their own success. At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable for some explorers, Leonid Fedun, vice president and board member at OAO Lukoil (LKOD), said in an interview in London. Continue reading

Commodities: Iran challenges US sanctions with plans to double oil output by 2018

As already mentioned here a few times, third world countries have no bottom, thus making any sanctions against Iran’s oil industry worthless. The world has a high demand for oil and all sanctions will do is force the oil route to change direction towards another country.

Iran has unveiled plans to double its oil production by the end of the decade and, ignoring sanctions, pump billions of dollars of its currency reserves into developing its share of the world’s largest natural gas reservoir in the Persian Gulf.

The country’s new oil minister, Bijan Zanganeh, has set a new output target of 5.7m barrels per day (bpd) of crude by 2018, according to the official state-run news agency Shana. The latest figures produced by the Organisation of Petroleum Exporting Countries (Opec), show that Iran is currently pumping about 3m bpd of crude.

Tehran is also sending strong signals to the international community that it plans to press ahead with the development of vast natural gas reserves that it shares with Qatar in the Persian Gulf. Moshtaq Ali-Gohari, head of the National Iranian Oil Company, told Shana over the weekend that the Islamic republic plans to invest almost $14bn (£8.3bn) to develop oil and gas fields that it shares with neighbours in the region. This could signal that Tehran is preparing for the further development of the South Pars field in the Gulf. Continue reading

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