Everything they do to save themselves only helps shale to kill them more surely, if more slowly.
Russia, Saudi Arabia Release Trial Balloon: Extend Production Cut by a Year
In a joint statement released on Monday, oil ministers from Russia and Saudi Arabia said the present crude oil production reduction agreement reached last November should be extended for another year...
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The present agreement was supposed to reduce OPEC production by 1.8 million barrels per day (bpd), but it failed miserably. Thanks to cheating (several members boosted their daily production in advance of the cuts so they wouldn’t feel as much pain when the agreement kicked in on January 1), and exemptions granted to Iran, Libya, and Nigeria, the actual net reduction was about 800,000 bpd. That translates to one percent of the world’s crude oil output. That was enough to push crude prices slightly higher for a couple of months but not enough to keep them moving higher. Instead crude oil prices on the world market fell, touching $45 a barrel in early May.
Albert Einstein is famous for many things, including his definition of insanity: doing the same thing over and over again and expecting different results. Russia and the cartel are reaching out to non-members in an effort to persuade them to join the production-cut agreement. Those efforts have recently been focused on Egypt and Turkmenistan, whose total daily production amounts to just 700,000 bpd. Eleven non-member states are being targeted by the cartel in what increasingly appears to be a last-gasp effort to cut world inventories and raise crude oil prices.
OPEC itself sees the problem: U.S. oil producers are coming back online far faster than originally anticipated. In last Thursday’s report it said:
U.S. oil and gas companies have already stepped up activities in 2017 as they start to increase their spending amid a recovery in oil prices. In addition to the growth in the U.S., higher oil production is expected in Canada and Brazil.
Because of those “stepped up activities,” OPEC said that the U.S. energy industry is likely to exceed earlier estimates substantially. Its previous estimate was that U.S. production of crude would increase by 285,000 barrels a day in 2017. Now it looks like U.S. production will increase by 820,000 barrels a day, neatly wiping out the reduction that OPEC’s present agreement was alleged to have accomplished.
More at: https://www.thenewamerican.com/tech/...-cut-by-a-year
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