Saudi Arabia Will Continue To Flood OIl Market

T

tay

Hall of Fame Member
May 20, 2012
11,548
0
36
Some OPEC members want output curbs to raise price but........


Tell me who is supposed to cut?” Chief Executive Officer Igor Sechin said on the sidelines of a conference in London on Wednesday.

Russia’s largest oil producer Rosneft OJSC said it will defend traditional markets and expressed doubts over any coordinated action by crude-exporting nations to curb output.

“Will Saudi Arabia cut production? Will Iran cut production? Will Mexico cut production? Will Brazil cut production? Who is going to cut?”

Venezuela has lobbied Russia, Iran, Saudi Arabia and other producers over its desire for a meeting between OPEC and non-OPEC countries aimed at a global agreement to restore balance to an oversupplied market. Oil prices have collapsed to their lowest levels in 12 years after Saudi Arabia led the Organization of Petroleum Exporting Countries to defend market share rather than cut production amid a global supply glut.

more

http://www.bloomberg.com/news/articles/2016-02-10/rosneft-ceo-skeptical-on-prospects-for-russia-opec-oil-deal
 
T

tay

Hall of Fame Member
May 20, 2012
11,548
0
36
Oil prices, which had edged into positive territory, fell after the Prince's comments.

The comments by deputy crown prince Mohammed bin Salman are seen as a challenge to Iran.

It has vowed to increase oil production following the lifting of Western sanctions.

In the Bloomberg interview, the prince also spoke about his plan for a giant public investment fund.

Worth more than $2 trillion, it would be designed to reduce Saudi Arabia's reliance on income from oil.

Iran will not take part in a conference in Doha on 17 April, where the freezing of oil output is due to be discussed.

"If all countries agree to freeze production, we will be among them," the prince told Bloomberg.

When asked whether Iran needed to be among those countries he said "without doubt".

PVM Oil Associates analyst Tamas Varga said there had been high hopes about the impact of a possible production freeze, but he added: "It is hard to see how sticking to the January output level would be supportive for oil prices. There will be no rebalancing this year."

Shailaja Nair, of energy information provider, said the market was still oversupplied with crude and there was no possibility of demand increasing in the short term.

"Considering the amount of crude already in the market, a freeze is not going to make much of a difference," she said.

A monthly survey by Reuters this week showed that oil output from the 13 Opec members rose in March on higher production from Iran and near-record exports from southern Iraq.

Iraq reported Opec's biggest supply growth last year, producing more than four million barrels per day - making it the cartel's second-largest producer after Saudi Arabia.

In February, Saudi Arabia and Russia said they would freeze oil output at January levels if other producers followed suit.

Oil prices have plunged from their recent peak of $116 in June 2014 because of oversupply and sluggish demand.

Oil prices slump on Saudi comments - BBC News
 
C

Curious Cdn

Hall of Fame Member
Feb 22, 2015
37,070
6
36
Those damned bastards in Quebec and Ontario, convincing the Saudis to flood the world oil market because they don't like Harper .....
 
Jinentonix

Jinentonix

Hall of Fame Member
Sep 6, 2015
10,616
5,259
113
Olympus Mons
There's more going on here than meets the eye. Less than a decade ago, the Saudis were deeply concerned that if they sustained the rate of production they had at that time, their reserves would run dry sometime around 2050-2060.
Now, with oil quickly falling out of favour, the Saudis have decided to double down and sell what they can, as quickly as they can before demand for oil really starts to drop.
Their thinking is, better to get rid of it now at a deflated price than get stuck with a huge reserve that will be almost worthless because of sharply falling demand over the next couple of decades.
 
You must log in or register to reply here.
Top Bottom