Economy 52,844 Posted September 25, 2015 Share Posted September 25, 2015 http://www.reuters.com/article/2015/09/23/us-opec-shale-idUSKCN0RN19I20150923 Going beyond targeting short-cycled shale, OPEC is now pursuing the idea of keeping oil prices down for several years to target other high cost producers that run on much longer cycles North Sea drilling is a decade long project that takes a long time to set up and up to a decade to deplete each well...In Canada it can take up to 5 years to set up a project and lots of money but each oil sands field can last 20-50 years once set up To eliminate the competiton from these long cycle projects, OPEC must keep oil prices down for several years Link to post Share on other sites More sharing options...
liquidsunshine 735 Posted September 25, 2015 Share Posted September 25, 2015 All of these is to pressure Russia, hunties. Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 All of these is to pressure Russia, hunties.most OPEC Nations dont care about Russia enough to be willing to endure low oil prices they really do wanna win back market share and obliterate competitors Link to post Share on other sites More sharing options...
liquidsunshine 735 Posted September 25, 2015 Share Posted September 25, 2015 most OPEC Nations dont care about Russia enough to be willing to endure low oil prices they really do wanna win back market share and obliterate competitorsDifferent perspective. Link to post Share on other sites More sharing options...
Shadow 6,697 Posted September 25, 2015 Share Posted September 25, 2015 Can other markets do anything to counter OPEC? Not that I'm complaining about low gas prices. I just don't want them to corner the oil market again. Alternative fuel vehicles needs to be the future. Stand in the light, cast your shadow. Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 Different perspective. i seriously doubt it... Saudi arabia maybe for the short term... but not most opec nations And Russia is not one of the highest cost producers... and as Dependent as Russia is on oil, Russias economy is STILL more diversified than most OPEC Nations Saudi Arabia due to cash reserves in the short term can tolerate low oil prices better than Russia, but in the long term Saudi Arabia would actually be more screwed. And other OPEC Nations with no cash reserves lets not even go there They wouldnt pursue a long term strategy because of Russia... i dont think this is a smokescreen... Their pledge to take back market share sounds genuine and makes sense... i dont think its a smoke screen Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 Can other markets do anything to counter OPEC? Not that I'm complaining about low gas prices. I just don't want them to corner the oil market again. Alternative fuel vehicles needs to be the future.Other markets cant really do anything because: #1 Outside OPEC the other major producers (USA, Russia, Canada & Norway) have private companies so direct control on oil investments are impossible unless the Government starts telling private companies what to do #2 OPEC are the lowest cost producers. Shale is midly expensive ($55/barrel break-even cost on average). North Sea Drilling highly expensive ($60/barrel break-even). And Canadas oil sands where im from are the most expensive ($70/barrel break-even on average) Most OPEC Nations on the other hand (with exeption of venezuela which also has mostly oil sands like Canada) has that cheap liquidy oil which they can produce as low as $5 to $20 per barrel depending on the field so they can tolerate these prices Here in Canada private companies have frozen all new projects although they are finishing ones they already started... The last project big project (fort-hills project) which started in 2012 will be done in 2017 and yield oil for 50 years. After that production wont grow here anymore if prices stay low. Link to post Share on other sites More sharing options...
mic 1,415 Posted September 25, 2015 Share Posted September 25, 2015 It means opec keep prices low to eliminate the competition until the new drillings are set?do we even still have enough conventional oil to dig until then? Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted September 25, 2015 Share Posted September 25, 2015 i seriously doubt it... Saudi arabia maybe for the short term... but not most opec nations And Russia is not one of the highest cost producers... and as Dependent as Russia is on oil, Russias economy is STILL more diversified than most OPEC Nations Saudi Arabia due to cash reserves in the short term can tolerate low oil prices better than Russia, but in the long term Saudi Arabia would actually be more screwed. And other OPEC Nations with no cash reserves lets not even go there They wouldnt pursue a long term strategy because of Russia... i dont think this is a smokescreen... Their pledge to take back market share sounds genuine and makes sense... i dont think its a smoke screen Its Iran .. Saudi's are head of the OPEC and they are in a cold war for regional influence. Since the west is allowing Iran to sell oil again and lift some sanctions, the Saudi's are trying to choke off one revenue source for Iran... Also, the profitability of oil like Economy says, has given rise to competitors they want to keep down. like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 It means opec keep prices low to eliminate the competition until the new drillings are set?do we even still have enough conventional oil to dig until then?tbh thats part of what makes me doubt this. I dont know that they have the capacity to increase production enough to compensate for rising demand AND everyone elses declining production they can manage this scheme maybe for 2-3 years as slow economy means slow demand growth... also there will be a delay in production declines from outside OPEC but within 2-3 years prices will have to rise above $70/barrel i think. I dont think they alone can sustain global demand as hard as they might try also on top of that, some of them are believed to be lying about how much oil they have for political OPEC quota reasons. Some of them may have less than they claim Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 Its Iran .. Saudi's are head of the OPEC and they are in a cold war for regional influence. Since the west is allowing Iran to sell oil again and lift some sanctions, the Saudi's are trying to choke off one revenue source for Iran...Also, the profitability of oil like Economy says, has given rise to competitors they want to keep down. i know saudi arabia is no fan of either Russia or Iran but i dont see all of OPEC going along with this just for Iran cuz most members dont care about Iran. Saudi Arabia may be the most influential member of the cartel but they have their limits i think the main thing is in fact that shale, oil sands and even deep sea and north sea drilling are threats shale in particular cuz its quick to increase production with that one Link to post Share on other sites More sharing options...
Solitaire 902 Posted September 25, 2015 Share Posted September 25, 2015 i know saudi arabia is no fan of either Russia or Iran but i dont see all of OPEC going along with this just for Iran cuz most members dont care about Iran. Saudi Arabia may be the most influential member of the cartel but they have their limits i think the main thing is in fact that shale, oil sands and even deep sea and north sea drilling are threats shale in particular cuz its quick to increase production with that oneDo you know what the estimates is for the amount of all total claimable OPEC oil is? And personally I'm living for these low gas prices; gas here in the Dallas, Texas area is hovering around $1.98 a gallon. This is the lowest I can remember gas ever being since I was in middle school and now with winter coming gas prices will probably drop again, at least by a few cents per gallon. I'd like to think these low prices are helping to boost the economy here. - Previously Sycothisis Link to post Share on other sites More sharing options...
Brainiac 11,171 Posted September 25, 2015 Share Posted September 25, 2015 If that means I get to continue to pay around $2.00 a gallon for gas I'm all for it. Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted September 25, 2015 Share Posted September 25, 2015 Do you know what the estimates is for the amount of all total claimable OPEC oil is? And personally I'm living for these low gas prices; gas here in the Dallas, Texas area is hovering around $1.98 a gallon. This is the lowest I can remember gas ever being since I was in middle school and now with winter coming gas prices will probably drop again, at least by a few cents per gallon. I'd like to think these low prices are helping to boost the economy here.The pump price for gasoline and commercial diesel is a double edge sword. Meaning that sectors of the economy that don't produce or make a profit from oil and gas production benefit...i.e. retail,manufacturing,service industry, and somewhat construction.On the flip side, a lot of economy is generated by oil profits. Some construction, and all oil/gas production service related companies, transportation ect. benefit from those profits. Any part of the economy that makes money benefits some other aspect ... they are all interrelated ... like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true Link to post Share on other sites More sharing options...
Economy 52,844 Posted September 25, 2015 Author Share Posted September 25, 2015 Do you know what the estimates is for the amount of all total claimable OPEC oil is? And personally I'm living for these low gas prices; gas here in the Dallas, Texas area is hovering around $1.98 a gallon. This is the lowest I can remember gas ever being since I was in middle school and now with winter coming gas prices will probably drop again, at least by a few cents per gallon. I'd like to think these low prices are helping to boost the economy here.OPEC has between 700 to 800 billion barrels of claimed oil reserves. The world currently has 1.6 trillion barrels so they half about half the worlds recoverable reserves But unlike many Nations, OPEC doesnt make surveying information public nor do they allow anyone else to survey their land so with OPEC u kinda are forced to take their word for it some have suggested since their production quota by each member is determined by reserves, theyd have political reasons to inflate their numbers... Almost all OPEC Nations reported large increases in reserves shortly after the quota agreement so there is strong evidence and suspician they dont really have that much but theres no way to know for sure Link to post Share on other sites More sharing options...
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