Economy 52,844 Posted February 26, 2016 Share Posted February 26, 2016 http://money.cnn.com/2016/02/24/investing/saudi-arabia-us-shale-oil/ Saudi Oil Minister "Ali al-Naimi" has shot down the notion that Saudi Arabia and OPEC engineered an oil crash to try and destroy US Shale He States Our strategy to boost production to win back market share is pure economics and business. This was not a war targeted at any specific Country or Industry. OPEC alone cannot supply all of Earths oil consumption and so we welcome new supplies such as Shale, Oil Sands and Deep sea Drilling. However a proper balance of investment must be found and the oil price crash is the most efficient way to correct and rebalance an over-invested market Ali also maintains that OPEC alone will not cut production to lift prices as it would defeat the purpose of winning back market share but states it would consider a cut if other major producers such as Russia joined in! Link to post Share on other sites More sharing options...
JevyDuty 2,961 Posted February 26, 2016 Share Posted February 26, 2016 They could deny it but all you have to do is follow the money. They saw themselves losing money and market shares when the US/Canada started developing the shale oil for cheap. So their response has been to crash oil prices so as to make the production of the North American oil shales economically unappealing. If this is not the reason then why are they letting the price of oil crash when they have such a huge amount of control on the price of oil? That's money they're losing... or is it? By gaining or maintaining market share, they are balancing out the temporary lose due to low oil prices and halts a fledging industry that has the potential to add a lot of competition to their monopoly. It is working by the way. We are producing less and less from oil shale because conventional oil is so cheap and it's not worth the hassle in comparison. Link to post Share on other sites More sharing options...
mmm 879 Posted February 26, 2016 Share Posted February 26, 2016 8 minutes ago, Larry Hill said: They could deny it but all you have to do is follow the money. They saw themselves losing money and market shares when the US/Canada started developing the shale oil for cheap. So their response has been to crash oil prices so as to make the production of the North American oil shales economically unappealing. If this is not the reason then why are they letting the price of oil crash when they have such a huge amount of control on the price of oil? That's money they're losing... or is it? By gaining or maintaining market share, they are balancing out the temporary lose due to low oil prices and halts a fledging industry that has the potential to add a lot of competition to their monopoly. It is working by the way. We are producing less and less from oil shale because conventional oil is so cheap and it's not worth the hassle in comparison. To make Iran and Shias more weak specially that Saudi Arabia is at war with them in Syria, Lebanon, Yemen, Bahrain.. but its not working specially after the US stopped the sanction against Iran. Link to post Share on other sites More sharing options...
Economy 52,844 Posted February 26, 2016 Author Share Posted February 26, 2016 16 minutes ago, Larry Hill said: They could deny it but all you have to do is follow the money. They saw themselves losing money and market shares when the US/Canada started developing the shale oil for cheap. So their response has been to crash oil prices so as to make the production of the North American oil shales economically unappealing. If this is not the reason then why are they letting the price of oil crash when they have such a huge amount of control on the price of oil? That's money they're losing... or is it? By gaining or maintaining market share, they are balancing out the temporary lose due to low oil prices and halts a fledging industry that has the potential to add a lot of competition to their monopoly. It is working by the way. We are producing less and less from oil shale because conventional oil is so cheap and it's not worth the hassle in comparison. Yes. Theyve admited for months that they need to hold market share and cause a reduction in investment in new sources of oil which are competition I think what he was trying to say is that this isnt personal against any Country specifically. Its just business and they wanna hold their market share and producing more oil and crashing lrices is how theyve achieved it Im not sure how effective this will be anytime soon tho. US shale has a very short cycle. Production off existing wells falls fast but its also very quick to drill new ones. As soon as oil price rebounds in theory US production should rise pretty quickly (unless the damage is so great that the industry is literally desmantaled and has to start all over) Here in Canada were the opposite of US. New projects take years to build but each oil sands field/project does not depleat for 50 years. Our production will keep rising until 2020 from oil sands projects that were already started, and even without further investment should prices stay low, our production will stay flat but not fall This might affect deep sea drilling more i think Link to post Share on other sites More sharing options...
Economy 52,844 Posted February 26, 2016 Author Share Posted February 26, 2016 8 minutes ago, faysalaaa1 said: To make Iran and Shias more weak specially that Saudi Arabia is at war with them in Syria, Lebanon, Yemen, Bahrain.. but its not working specially after the US stopped the sanction against Iran. The Saudis are pissed. Now that sanctions are lifted, Iran wants to increase oil production by another 1 million barrels a day by end of 2016 and anticipation of that is also preventing an oil price recovery cause the oversupply doesnt seem like its going away anytime soon in the mean time some oil storage facilities are already close to full Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted February 26, 2016 Share Posted February 26, 2016 2 hours ago, Economy said: The Saudis are pissed. Now that sanctions are lifte, Iran wants to increase oil production by another 1 million barrels a day by end of 2016 and anticipation of that is also preventing an oil price recovery cause the oversupply doesnt seem like its going away anytime soon If the value of crude oil is low it also discourages further investment in undeveloped oil fields. Iran has quite a few known oil deposits with 'no' drilling or production because of the sanctions. 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 February 26, 2016 Author Share Posted February 26, 2016 9 hours ago, Woolfsmck said: If the value of crude oil is low it also discourages further investment in undeveloped oil fields. Iran has quite a few known oil deposits with 'no' drilling or production because of the sanctions. But theirs is really cheap to produce. At $30/barrel unlike US Shale, Canada Oil Sands or European Deep Sea Drilling, they can still make money and theyve made it clear that they want to regain market share lost during sanctions i think 1 million barrels increase in 1 year is a bit ambitious. But im sure they will increase as much as they can If oil prices dont recover, Here in Canada we will stay flat in production at 5 million barrels a day once all projects in construction are done cuz no new ones are being started Oil Sands will stay flat for 40-50 years on existing projects until they run out (oil sands production does not change until depleation unlike every other sort of oil) US Shale should snap back as soon as prices reach and stay at $50/barrel however Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted February 27, 2016 Share Posted February 27, 2016 10 hours ago, Economy said: But theirs is really cheap to produce. At $30/barrel unlike US Shale, Canada Oil Sands or European Deep Sea Drilling, they can still make money Produce.... sure, but it takes investment capital to 'build' production facilities. Iran's 'private' sector doesn't have a great deal of money right now and those who do are very hesitant to invest for a number of reasons. One, adding production to an over saturated oil market doesn't make financial sense. Two, even with th sanctions lifted, the region and Iranian leadership specifically, is unstable. So the potential for governement collapse, take over or relgious war add to the risk that all investments in Iranian oil production construction could end up in a total loss. 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 February 27, 2016 Author Share Posted February 27, 2016 4 hours ago, Woolfsmck said: Produce.... sure, but it takes investment capital to 'build' production facilities. Iran's 'private' sector doesn't have a great deal of money right now and those who do are very hesitant to invest for a number of reasons. One, adding production to an over saturated oil market doesn't make financial sense. Two, even with th sanctions lifted, the region and Iranian leadership specifically, is unstable. So the potential for governement collapse, take over or relgious war add to the risk that all investments in Iranian oil production construction could end up in a total loss. It may not make financial sense in the short term but Iran may be looking to increase market share now so that when prices do finally rebound they have a bigger customer base to sell to. Here in Canada we are increasing imports from middle East since US production is falling. Also the US oil ban being lifted (which Canada was an exeption to) also means more oil exported else where and less to Canada And since we still have no infrastructure to bring our own oil to where population is (thanks a lot tree huggers) we might just look for someone like Iran to fill the GAP! Tho i must say I hope we continue to import our bulk from US and Saudi Arabia. Dont really trust Irans reliability Link to post Share on other sites More sharing options...
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