Oil production cut backs announced

[Jetronic]

Saudi Arabia announced that it will cut back it's oil production by 5%, -500,000 barrels/day. Russia had announced the same earlier.

Iraq (211,00), UAE (-144,000), Kuwait (-128,000), Kazachstan (-78,000), Algeria (-48,000), Oan (-40,000) and Gabon (-8,000) will follow suit

This will drop the worlds production by 1.5 % (including the Russian production cut) or over 1.6 million barrels per day in total. The price per barrel is expected to go up to the $95-$120 range by the end of the year, from around $80 now.

How are the strategic reserves doing at the moment?

Inflation is not going to end any time soon I expect

 

[Slow Car Sport Mode]

Yay. My heart sunk yesterday when I heard this news. Coordinated OPEC production cut, on top of another cut announced late last year (IIRC.) That's just great.

What we are doing isn't working...

Has anyone ever asked, "What happened?" Although, at that point we probably get into bias..

 

[Jetronic]

Yay. My heart sunk yesterday when I heard this news. Coordinated OPEC production cut, on top of another cut announced late last year (IIRC.) That's just great.

What we are doing isn't working...

Has anyone ever asked, "What happened?" Although, at that point we probably get into bias..

This was decided on an individual title, outside of OPEC for some reason

 

[Snagglefoot]

Canadian oil imports by rail are 120,000 bbls per day and can be ramped to 400,000 bbls per day if need be.

And here is an update of oil imports into the USA. Canada is the largest source by far, closing in on 4 million bbls per day. Oil from Saudi Arabia is about one tenth that amount.

 

[MParr]

It gets better, the U.S. Dollar is falling out of favor as a trade currency.

 

[MSCH]

WTI was down in the 65+ dollar range a few weeks ago, these people are just trying to keep their profit margin..

 

[Zee09]

Nothing new here.
Just the same old fleece job we have seen for decades....

 

[Jetronic]

Canadain oil imports by rail are 120,000 bbls per day and can be ramped to 400,000 bbls per day if need be.

And here is an update of oil imports into the USA. Canada is the largest source by far, closing in on 4 million bbls per day. Oil from Saudi Arabia is about one tenth that amount.

View attachment 148723

Doesn't matter where it comes from you have to pay the global price of a barrel. Transport will be cheaper though.

And even if production goes up by 300,000 barrels a day, global production went down 1.2+ million barrels

 

[Jetronic]

WTI was down in the 65+ dollar range a few weeks ago, these people are just trying to keep their profit margin..

Yes it was, but even before the announcement prices were back up to $80 which has always been an acceptable price point for Saudi Arabia. Seems they want $100 now....

 

[BMWTurboDzl]

Saudi Arabia announced that it will cut back it's oil production by 5%, -500,000 barrels/day. Russia had announced the same earlier.

Iraq (211,00), UAE (-144,000), Kuwait (-128,000), Kazachstan (-78,000), Algeria (-48,000), Oan (-40,000) and Gabon (-8,000) will follow suit

This will drop the worlds production by 1.5 % (including the Russian production cut) or over 1.6 million barrels per day in total. The price per barrel is expected to go up to the $95-$120 range by the end of the year, from around $80 now.

How are the strategic reserves doing at the moment?

Inflation is not going to end any time soon I expect

It's not all that different from prices during 2011-2014. Was it inflation back then as well?

Crude Oil vs Gasoline Prices

This interactive chart compares the monthly price performance of West Texas Intermediate (WTI) Crude Oil vs national average gasoline prices back to 1986.

www.macrotrends.net

 

[Jetronic]

It's not all that different from prices during 2011-2014. Was it inflation back then as well?

Crude Oil vs Gasoline Prices

This interactive chart compares the monthly price performance of West Texas Intermediate (WTI) Crude Oil vs national average gasoline prices back to 1986.

www.macrotrends.net

I'm saying, this will keep the current inflated prices going, as the high energy cost is fueling the current inflation and it's not exactly going down. This will affect natural gas and electricity prices aswell.

 

[pbm]

It gets better, the U.S. Dollar is falling out of favor as a trade currency.

Respect for America is down all around the world....I wonder why.

 

[BMWTurboDzl]

Respect for America is down all around the world....I wonder why.

Because we use the SWIFT system as a weapon of mass destruction?

 

[Zee09]

Respect for America is down all around the world....I wonder why.

You can't blame @AutoMechanic for everything so I will do so for you...

 

[BMWTurboDzl]

I'm saying, this will keep the current inflated prices going, as the high energy cost is fueling the current inflation and it's not exactly going down. This will affect natural gas and electricity prices aswell.

Driving season is ahead so this is just normal stuff which happens every spring. Of course OPEC nations have to abide by the cuts.

Interestingly on an inflation adjusted basis the price of gasoline today is the same as what it was in 2003. Energy prices are volatile and there are ways in which an individual can to a degree insulate themselves from that volatility.

 

[zzyzzx]

Does this mean that it's too late to buy more oil related stocks?

 

[BMWTurboDzl]

It gets better, the U.S. Dollar is falling out of favor as a trade currency.

That would be a good and bad thing. In any case de-dollarization has a LOOONG way to go before it actually has an impact. As it currently stands almost 1/2 of international trade is settled in USD. The Euro makes up ~ 1/3 and other currencies make up the rest. Fearmongers want to point to China but that is overhyped.

Revisiting the international role of the US dollar

xxxxx

www.bis.org

 

[Snagglefoot]

Does this mean that it's too late to buy more oil related stocks?

June 2020 would have been a good time.

 

[MaximaGuy]

Cartels are bad for anyone - they club up together and set prices. The worst part is the glut in oil supplies resulting in more uncontrolled inflation and higher interest rates to curtail inflation. Nothing is working on the Fed level to curtail inflation and this news couldn't have come at a worse time. Moving to hybrids and electrics is the way out of this hemorrhaging dogma of oil prices.

 

[pbm]

That would be a good and bad thing. In any case de-dollarization has a LOOONG way to go before it actually has an impact. As it currently stands almost 1/2 of international trade is settled in USD. The Euro makes up ~ 1/3 and other currencies make up the rest. Fearmongers want to point to China but that is overhyped.

Revisiting the international role of the US dollar

xxxxx

www.bis.org

I don't see anything 'good' about the dollar being replaced as the world's foremost trade (reserve) currency....at least not for American consumers.