Is OPEC Done For?

[longknife]

An interesting piece in which BofA and CitiCorp have too different views on the falling prices of oil and the increased availability of LNG.


So, we're enjoying lowered fuel prices at the moment. How long will it last? Will we find ourself paying lots and lots more in the future as the situation corrects itself?


Read more @ Bank of America sees 50 oil as Opec dies - Telegraph

 

[martybegan]

OPEC worked when all the member states were on the same page. Now Some of them need oil revenues at high levels far more than Saudi Arabia, which is still the OPEC king. Saudi can handle lower prices, the other places? Not so much.

 

[waltky]

Oil could get even cheaper...

OPEC likely won't move to boost oil price amid infighting
3 Dec.`15 — Cheap oil that could get even cheaper: That's the challenge OPEC ministers face as they try to cut their losses at a time when supply is outstripping demand. But their hands appear tied.

Ahead of their meeting Friday, there is recognition that the 12-member Organization of the Petroleum Exporting Countries will be unable to nudge up prices, at least in the short term. Non-OPEC countries like Russia and the U.S. continue to challenge OPEC for customers. And within the cartel, Iran and Iraq want to start pumping more, even though regional rival Saudi Arabia appears unwilling to play along by reducing its own output. The Saudis and other OPEC states are looking to maintain their market share at a time when low prices are already cutting into their revenues. The upshot is the meeting will likely decide to maintain the official OPEC level of 30 million barrels a day, urge members to cut back on overproduction and hope for better times next year. That means oil could get even cheaper.

Iran's comeback is tied to the looming end of sanctions imposed over its nuclear program. Embargoes on Iranian oil are to be lifted over the next few months once a nuclear deal it signed with six world powers goes into force. Senior oil official Amir Hossein Zamaninia said last week Iran hopes to bring an extra 500,000 barrels on the market by early next year. He said he hopes the extra output will be accommodated within OPEC's formal ceiling of 30 million barrels a day. Arriving for the meeting Friday, Iranian oil minister Bijan Namdar Zanganeh said Iran is ready to discuss a ceiling for its production — but only after his country makes a "full return to the market."

But Iran's hopes of a cutback from others for now are unlikely to be fulfilled. Ahead of Friday's meeting, OPEC already was churning out well over than 31 million barrels a day and OPEC members are likely to continue producing more than their share as they push to compensate for low prices by increasing output. Some of those extra barrels will likely come from Iraq. The world's fastest-growing source of crude this year, it was pumping more than 4 million barrels a day last month and was responsible for last month's biggest monthly rise in output among all OPEC countries.

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[Penelope]

One must study the Oil Embargo of 1973 to fully understand the situation.

It just might end up being Iran's time to reign over SA.

 

[CultureCitizen]

An interesting piece in which BofA and CitiCorp have too different views on the falling prices of oil and the increased availability of LNG.


So, we're enjoying lowered fuel prices at the moment. How long will it last? Will we find ourself paying lots and lots more in the future as the situation corrects itself?


Read more @ Bank of America sees 50 oil as Opec dies - Telegraph

The Saudis will not stop until they see the US fracking industry obliterated or their low prices puts them into a financial crisis.
The fracking industry will continue to shrink for the following year but there will still be some fracking done through the first half of 2017. Then I would expect oil prices to rebound. Looking at their reserves it is clear that Saudis can keep the current prices for two years as a minimum and four as a maximum ( if they start cutting down their imports ).
That, or a global financial crisis hits first. In that case I'm not sure how things could go.

 

[Billyjack]

When one considers that 750,000,000 paper barrels are traded daily on the Chicago Mercantile exchange versus around 90,000,000 barrels per day of liquid oil, when there is an oversupply situation Goldman Sachs controls the price of oil more than OPEC.