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Thread: Saudi Arabia and OPEC are doomed.

  1. #691
    Digital technology adoption in all stages of upstream operations in the oil and gas industry has seen a steep rise recently. While a lot has been written about the benefits of digitizing various aspects of the well-drilling, extraction, and field maintenance processes, there is also another major field where digital tech is changing the game: before the well-drilling even begins.
    In Alaska, for instance, new technology in oil and gas exploration has led to the discovery of more than 1.5 billion barrels of crude oil in the North Slope in just two years, S&P Global Platts recently reported. These are deposits that were known to be there but the resources they held could not be mapped or measured, so the deposits were considered unproductive before digital tech, in the form of advanced 3D seismic surveys and new data processing techniques, came along.
    So, established exploration methods are one area where there is a surge of improvements but there are also alternative exploration techniques emerging, such as soil analysis. A Dutch company, Biodentify, collects thousands of soil samples to analyze the DNA of thousands of microorganisms for traces of hydrocarbons in their environment. The company utilizes machine learning for the task and to calculate the potential reserves of a deposit with, according to the company, more than 70 percent accuracy. What’s more, the whole procedure takes between 6 and 10 weeks, which is a relatively short time, especially in light of the fact that it reduces the risk of drilling unproductive wells.

    New drilling tech is also helping lower costs and improve results. S&P Global Platts’ Tim Bradner notes coiled tubing drilling as an alternative to the multilaterals in horizontal drilling. Coiled tubing involves drilling horizontal wells with a flexible tubing bit, which is cheaper than drilling with rotary rigs. It could be so cheap, in fact, that drilling costs per barrel of new oil in already producing fields could be as little as US$30.Shell, on the other hand, is focusing on developing artificial intelligence to use in drilling, among other things. Business and tech expert Bernard Marr wrote recently in a story about his work on data strategy with the supermajor that Shell is using reinforcement learning, a form of machine learning, to improve drilling results and also reduce wear and tear on the equipment, which ultimately, once again, saves costs.

    The list of examples can continue and it will only become longer in the future. The oil and gas industry has been remarkably fast in adopting what digital technology has to offer and spurring innovation aimed specifically at the industry.

    More at: https://oilprice.com/Energy/Crude-Oi...In-Alaska.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

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  3. #692
    South Korea has been buying increasing amounts of U.S. crude oil and will continue to do so this year, Reuters reports, citing data from its service Eikon. This will help narrow the Asian economy’s trade surplus with the United States, improving moods in Washington and strengthening bilateral ties.
    Over this month and next, for example, imports of U.S. crude oil and liquefied natural gas into South Korea are seen at 18 million barrels and 900,000 tons, respectively.
    “At the moment, the trend (of importing U.S. crude) will stay ... The economics for U.S. crude is a little bit better than Middle East and North Sea oil,” Reuters quoted a source from the South Korean refining industry as saying.

    More at: https://oilprice.com/Latest-Energy-N...This-Year.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  4. #693
    Basra Oil Co,. the state-owned operator of the huge Majnoon field in Iraq, plans to boost production from it to 450,000 bpd by 2021 by drilling 40 new wells, Reuters reports, citing the Iraqi Oil Ministry.
    This would be more than double Majnoon’s current rate of production, which averages 240,000 bpd. The 40 new wells will be in addition to another 40, already contracted to Schlumberger last month.


    Iraq had oil reserves of 153 billion barrels as of 2017, and in 2018 Oil Minister Jabar al-Luaibi said the actual reserves could be twice as large. If the higher estimate proves true, it would make Iraq the largest oil-rich country in the world, ahead of Venezuela, which claims its reserves are just above 300 billion barrels, and also ahead of Saudi Arabia.
    Basra Oil Co. pumps most of Iraq’s oil, accounting for 75 percent of the total. Last year, a company executive said Basra Oil Co. planned to increase its output to 5 million barrels daily by 2025. Most of the additional production, the executive said, will come from fields that are operated by international oil companies, but some will come from BOC-operated projects.

    More at: https://oilprice.com/Latest-Energy-N...50000-Bpd.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  5. #694
    Rachel Notley, Alberta’s Premier, said prices of Canadian crude are high enough for producers to start gradually ramping up production again, the Canadian Press reports.
    Notley ordered a production cut of 325,000 bpd, starting this month, to clear excess supply and support prices, which last year plunged to the deepest discount to West Texas Intermediate in years, at one point exceeding US$50 per barrel.
    The cuts were to be in place for several months until the inventory overhang cleared, and then they were to be reduced to 95,000 bpd. However, Western Canadian Select reacted to the premier’s announcement even before producers began reducing their output. Prices, in fact, rose so fast, that some industry observers noted Canadian crude is becoming less competitive because of the small discount.
    Now that the primary goal of the cuts has been achieved, Notley said producers could reverse the cuts, boosting their production by a combined 75,000 bpd in February and March.

    More at: https://oilprice.com/Latest-Energy-N...tion-Cuts.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  6. #695
    India’s top refiner, Indian Oil Corporation, is exploring opportunities to sign an annual term deal to buy U.S. crude oil, Indian Oil’s chairman Sanjiv Singh said on Wednesday, as Indian refiners look to diversify their crude supplies amid uncertainties over whether they will continue to be allowed to purchase Iranian oil once the current U.S. sanction waivers expire.

    More at: https://oilprice.com/Latest-Energy-N...uy-US-Oil.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  7. #696
    Global deepwater liquid production is set to jump by 700,000 bpd from 2018 to reach a record-high of 10.3 million bpd in 2019, thanks to new fields coming on stream in Brazil and the U.S. Gulf of Mexico, research firm Rystad Energy said on Friday.
    In addition to Brazil and the United States, the other biggest deepwater producers will be Angola, Norway, and Nigeria, according to Rystad.
    For the U.S. Gulf of Mexico, energy consultancy Wood Mackenzie expects “a historic year” in 2019, with Shell’s Appomattox marking the first production ever from a Jurassic reservoir in the Gulf of Mexico. Drilling in the area is also set to post the first increase in four years and new projects are expected to be sanctioned, according to WoodMac.
    Operators have driven down the cost of developing new deepwater barrels by more than 50 percent since 2013, Wood Mackenzie said in November.
    According to the consultancy’s data and analysis, the most competitive region for deepwater is the Americas, and in particular Brazil, Guyana, and the Gulf of Mexico. In those areas, more than 50 billion boe of pre- and post-sanction deepwater developments are now profitable below an oil price of US$60 a barrel, based on break-even costs.

    The industry has started to increase investments in deepwater after the downturn, encouraged by the cost cuts and realizing that offshore resources would be important for meeting demand growth, WoodMac said.
    The consultancy sees global annual capital expenditure (capex) on deepwater rising to around US$60 billion by 2022 from some US$50 billion currently, driven by big projects in Guyana, Brazil, and Mozambique.

    More at: https://oilprice.com/Energy/Crude-Oi...d-In-2019.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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  9. #697
    OPEC’s crude oil production in January dropped by a massive 890,000 bpd compared to December—the largest monthly decline in the cartel’s production since January 2017 when the initial production cut deal began, the monthly Reuters survey found on Thursday.
    The largest production drop in two years came after OPEC’s largest producer and de facto leader Saudi Arabia, as well as its Gulf Arab allies, cut deeper than pledged in the new production cut deal effective January 1, 2019. Production declines in the three countries that won exemption from the cuts—Libya, Iran, and Venezuela—also contributed to the steepest monthly production drop at OPEC in two years, according to the Reuters survey.
    Among the three exempted producers, Libya’s production and exports have been disrupted since early December due to port closures courtesy of bad weather as well as security incidents and issues at its largest oil field Sharara, which remains shut-in. With Venezuela’s crisis deepening, production continues to fall, while Iran’s oil output also drops as its exports are limited due to the U.S. sanctions.
    According to the survey tracking supply to the market and based on shipping data and information provided by sources at oil companies, OPEC’s crude oil production in January was 30.98 million bpd, down by 890,000 bpd from December 2018.

    More at: https://oilprice.com/Energy/Energy-G...Two-Years.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  10. #698
    EIA’s weekly report showed that U.S. imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd). This is the second lowest level in weekly data going back to 2010.”

    More at: https://oilprice.com/Energy/Energy-G...To-The-US.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  11. #699
    The flow of foreign labor into the United Arab Emirates is drying up, leaving the country's leaders to grapple with a tricky balancing act: How to attract and retain enough workers from abroad to keep its economy humming without alienating its own citizens.
    As it looks to bolster its labor market, Abu Dhabi has instituted a range of stimulus plans, visa reforms and business law changes over the past year. But those solutions risk upsetting Emirati natives, who see extended-stay expatriates as a threat to their way of life and elevated social status. Their discomfort opens the door for a historic shift in the country's generally stable political system.


    For decades, foreign expatriates have constituted about 80 percent of the Emirati population. This is due both to the country's small native population and its robust economy (relative to those of many of its Arab Gulf peers), which requires a labor pool that's both much larger and more specialized than what the minority Emirati population can provide.
    For a time, expatriates who met these demands — which include English-speaking skills and prestigious university credentials — flocked to the United Arab Emirates on their own accord. This was especially true during the global financial crisis of 2008-2009 when highly skilled workers seeking refuge from countries with weakened economies flocked to Dubai (where about half of the country's jobs reside). But the factors that once pushed and pulled many expatriates to the country have largely dried up, causing a drop in its appeal to foreign labor.


    The global recovery, for one, means that most workers can find good jobs and strong economies at home. Recent political events have also tainted the United Arab Emirates' once placid and safe reputation. Several high-profile arrests of expatriates and locals have taken place in the wake of the Arab Spring, the blockade of Qatar and rising strife between Gulf Arab states and Iran.
    But shifts in the Emirati economy are perhaps most responsible for driving expatriates away. This includes the recent introduction in January 2019 of value-added taxes (VAT), plus increased fees for services, a rising cost of living, and lower or stagnant salaries — all of which have eaten into the paychecks of foreign workers once lured by the country's promise of low prices and high incomes.


    As its once-reliable supply of expatriates dries up, the labor market has shown signs of slowing, with stagnating or dropping retail market prices, a contracting employer index, and dips in both private sector growth and consumer spending. But Abu Dhabi has fewer tools with which it can address the economic problems keeping foreign workers away. Not only does it not want to roll back the revenue-generating VAT taxes and fees, but it also cannot stop the rise of prices of everyday consumer goods as the economy develops.
    As a result, the government has instead focused on tackling the logistical barriers to employment that are more within reach by introducing several labor market reforms over the past year. Most recently, this included 10-year visas — the longest in Emirati history — which the government began issuing in January 2019.
    In 2018, the government changed its rules to allow retirees with enough assets to stay in the country past 55 (whereas previously older expatriates needed special exemptions) and extended the time that students graduating from its schools and universities could find work to a year. In addition, the country is now allowing foreign workers to switch jobs without having to first leave the United Arab Emirates — a boon to expatriates who found the process of job switching cumbersome.


    In theory, foreign workers who once cycled out after only a few years will now have a greater opportunity to "put down roots" in the United Arab Emirates — especially those from poorer countries like India, Pakistan, other parts of the Arab world and the Philippines, who already make up the majority of country's longest-standing residents. However, this risks breaking the government's social contract with its native Emirati community, which has in part long been predicated on expatriates staying in the country only for a short period.
    Native Emiratis — who have enjoyed generous social welfare packages paid for by the country's traditionally strong economy since the United Arab Emirates' independence in 1971 — will see the reforms as a potential demographic and economic threat to their elevated social status. Those in the less wealthy northern Emirates, in particular, regularly voice concern about how the current system allows foreign workers to "take away" their jobs. This means that the more that visa reforms make expatriates appear like permanent residents, the more Emirati citizens will pressure their government to respond.


    In the short term, this backlash will likely cause the UAE government to consider rolling back or amending visa reforms, creating uncertainty over which changes will remain and which will not. It could also pressure the government to increase economic subsidies and cultural privileges, such as cash handouts or the nationalization of certain job categories, to assure the preservation of Emirati natives' social status. Neighboring Saudi Arabia has implemented similar measures as part of its own Vision 2030 economic restructuring reforms.
    Abu Dhabi could start implementing measures that formally repress the expression of foreign cultures as well, like scaling back tolerance for expatriate holidays such as Christmas, stricter policing of clothing and behavior in public spaces, and more stringent standards for Emirati language and culture in private schools.

    However, these short-term compromises will likely not go far enough to fully defuse the growing strains between expatriates and Emirati locals, opening the potential for more widespread and longer-term political repercussions. Regardless of whether expatriates actually end up staying longer, the mere threat of a more permanent foreign population will continue to deepen divisions between the wealthy emirates of Abu Dhabi and Dubai in the south and the five poorer emirates in the north.

    This could, in turn, affect the functions of the Federal National Council (FNC), the country's partially elected but otherwise largely toothless legislative body — and the only federal institution where the views of the five northern emirates are guaranteed representation. Pressured by native populations within their emirates, FNC members could start demanding greater oversight on not only visa rules or processes, but also other rules and issues unrelated to labor market reform. This would move the FNC closer to a true federal authority, posing a more permanent challenge to the country's current political system that for so long has given generous leeway to Dubai and Abu Dhabi's rulers on national decisions.

    More at: https://worldview.stratfor.com/artic...-term-problems
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  12. #700
    So, is this the SS Boromir masturbation thread? No one else has posted in this thread since Pearl Harbor day.

    How much are you getting paid to keep this one afloat??
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  13. #701
    Even as the US brought sanctions against Venezuela's state-run oil company, oil prices have slumped over the past week, erasing some of a January rebound that saw crude prices rebound alongside equities. But oil bulls who worried that Saudi Arabia and Russia's tandem production cuts wouldn't be enough to finally wedge a floor under crude prices can relax: Because if a plan reported Tuesday by the Wall Street Journal pans out, OPEC might recover the price-setting power it is in fear of ceding to the US as the shale boom continues to...well...boom.

    With the US having cemented its new position as the biggest oil producer in the world thanks to shale, and President Trump exerting pressure on Saudi Arabia to drive oil prices lower, WSJ reports that Saudi Arabia and its Gulf allies in OPEC have proposed a formal alliance with a 10-nation group of petroleum producers led by Russia - and alliance that would "transform the cartel" (which has recently suffered speculation that it has lost its relevance after Qatar announced its plans to leave the bloc).

    However, Iran and some of its allies within the cartel have opposed the tighter partnership, fearing it could lead to Saudi Arabia and Russia dominating the organization.
    The proposal would formalize the loose union between members of the Organization of the Petroleum Exporting Countries and the group led by Moscow, which includes some former Soviet republics and other countries. The two groups have increasingly worked together in recent years, including in December when they agreed on a deal to curb production.
    Iran and other producers have opposed a tighter partnership, fearing it could be dominated by Saudi Arabia and Russia, according to officials in the cartel. Riyadh and Moscow are the world’s top two oil exporters. A Russian energy ministry spokeswoman didn’t respond to a request for comment.
    Given that Saudi needs oil back at $80 a barrel to balance its national budget, the alliance would likely be geared toward Saudi and Russia achieving the goal of higher prices. To achieve higher prices, they need more leverage against the US.
    To be sure, it's not like this level of collusion between OPEC and non-OPEC producers would be unprecedented. The two groups have been increasingly working together in recent years. As recently as December, the 14-member OPEC and the 10-member bloc led by Russia struck a deal to cut production in a bid to lift prices after global oil prices shed more than one-third of their value during the month of October.
    According to a proposal detailed by WSJ, once formalized, the deal - which would function like a non-legally-binding, informal arrangement, wouldn't be all that different than the process that led to the December agreement.
    In December, the 14-strong OPEC and 10 allies led by Russia reached a new agreement to tackle an oversupplied global crude market by cutting production by a combined 1.2 million barrels a day.
    At the time, the groups put off a final decision on the nature of their future cooperation. The groups first collaborated in late 2016 to help oil prices to rebound after a two-year crash. It was Russia’s first solid alliance with the cartel in decades.
    Under the proposal, OPEC would continue regular meetings to agree on production and monitor implementation with the Russia-led group, according to OPEC officials. Under the current draft document, the alliance could last up to three years and wouldn’t be legally binding, one of the OPEC officials said.
    Participants still need to iron out differences, said another OPEC official. The first cartel official said all sides were likely to end up agreeing on some arrangement as oil prices could crash without a deal.
    Still, a more formalized - but still not legally binding - pact faces some hurdles from wary members of OPEC, because some members of the new pact would need to run the issue by their Parliaments. And Iran wants any relationship with producers outside of OPEC to remain as loose as possible. Ideally, Tehran would want the expanded group to meet as infrequently as possible - only when a market crisis requires it - and it would also like all OPEC and non-OPEC members to attend the same meeting. Oman, meanwhile, would like to limit the number of meetings with the non-OPEC members.
    Suhail Al Mazrouei, the UAE energy minister, reportedly said that a long-term pact still faces hurdles (though the current plan would call for the alliance to last three years).
    Notably, the plan is a compromise between the status quo and a Saudi and Russia-led proposal that called for the creation of an entirely new bloc which would have been de facto controlled by the Kingdom and Russia, which would have been granted full membership.


    More at: https://www.zerohedge.com/news/2019-...lliance-russia
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  14. #702
    OPEC’s crude oil production plummeted by nearly 1 million bpd from December to 30.86 million bpd in January, marking the lowest production for the cartel since March 2015, as Saudi Arabia over-delivered and members exempted from the reduction pact saw their output further drop, according to the S&P Global Platts survey.
    OPEC’s production fell by 970,000 bpd from December to January—the month in which the new production cuts took effect, with Libya, Venezuela, and Iran exempted. The monthly drop in the cartel’s crude output was the steepest since December 2016—the month just before the previous round of cuts began, the Platts survey of shipping data, industry officials, and analysts showed.
    Saudi Arabia’s oil production in January stood at 10.21 million bpd, or 100,000 bpd below its pledged ceiling of 10.311 million bpd, and the lowest Saudi production since May 2018, according to the Platts survey.
    The crude oil exports of OPEC’s largest producer and de facto leader fell by 500,000 bpd to 7.20 million bpd in January, Platts trade flow data showed.
    Among the members exempted from the cuts, Libya’s production plunged by 120,000 bpd to 850,000 bpd as its largest oil field Sharara has been shut in since early December due to security risks and concerns. Iran, under U.S. sanctions, saw its production drop by another 80,000 bpd to 2.72 million bpd, while Venezuela’s output fell 10,000 bpd to 1.16 million bpd. Sources at PDVSA have told Platts that as of this month Venezuela’s production is expected to plunge because under the new U.S. sanctions, Venezuela will not be able to import U.S. naphtha to dilute its heavy crude grades.

    More at: https://oilprice.com/Energy/Crude-Oi...arch-2015.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  15. #703
    Baker Hughes reported an increase in the number of active oil and gas rigs in the United States this week.
    The total number of active oil and gas drilling rigs rose by 4 rigs, according to the report, with the number of active oil rigs increasing by 7 to reach 854 and the number of gas rigs decreasing by 3 to reach 195.
    The oil and gas rig count is now 74 up from this time last year, 63 of which is in oil rigs.


    The EIA’s estimates for US production for the week ending February 1 shows an increase at an average rate of 11.9 million bpd*—a record for the US—for the fourth week in a row.

    More at: https://oilprice.com/Energy/Energy-G...Stabilize.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  16. #704
    Legislation targeting OPEC is suddenly gaining steam in the U.S. Congress, raising alarm bells for the cartel.
    On Thursday, the House Judiciary Committee passed a bill that would allow the U.S. Justice Department to sue members of OPEC for manipulating the oil market. The so-called “NOPEC” bill would remove sovereign immunity, exposing member countries to antitrust regulation.
    The bill has appeared in the past under prior administrations. But previous presidents from both political parties have opposed taking punitive action, fearing damage to the U.S.-Saudi relationship.
    Times have changed. President Trump has repeatedly posted angry tweets about OPEC, blaming it for high gasoline prices. That led to a revived push for the NOPEC legislation. The murder of Saudi journalist Jamal Khashoggi may have also been a turning point, erasing a lot of goodwill for Saudi Arabia in Washington.
    In theory, OPEC members could face confiscation of their assets in the United States. Saudi Aramco, for instance, controls Motiva Enterprises, which owns the largest oil refinery in the country in Port Arthur, Texas.
    According to the Financial Times, the prospect of the NOPEC bill becoming law has raised alarm bells not just for OPEC, but also for international oil companies who fear reprisals abroad. Companies like ExxonMobil and BP have major stakes in projects in places like Nigeria and Iraq. These OPEC-member countries could retaliate if they face punitive action from the U.S. government. The FT reports that the oil majors, along with the American Petroleum Institute and the U.S. Chamber of Commerce, are lobbying against the NOPEC legislation.
    Analysts speculate that Qatar exited OPEC in 2018 not just because of its rivalry with Saudi Arabia, but also because it has major interests in the U.S., and does not want to face antitrust action. Qatar Petroleum, along with ExxonMobil, just gave the final investment decision for the $10 billion Golden Pass LNG project in Texas.

    Senator Chuck Grassley, a Republican, has proposed a companion bill in the Senate. “The oil cartel and its member countries need to know that we are committed to stopping their anti-competitive behaviour,” Grassley said. Across the aisle, Sen. Amy Klobuchar of Minnesota, also representing a state with significant ethanol interests, came out in support of the bill.“Given President Trump’s known hostile stance towards OPEC it now looks like a very good chance that the bill will be voted through,” Bjarne Schieldrop, chief commodities analyst at SEB, said in a statement. “The prospect of a passage of NOPEC legislation has added bearish pressure to Brent crude.”
    It is still too early to say with any certainty, but if the NOPEC legislation were to become law, it could theoretically make it much more difficult for OPEC to set production limits with the aim of achieving certain price targets. It could also put in jeopardy the formalization of the OPEC/non-OPEC alliance with Russia, the so-called OPEC+ arrangement. OPEC and the non-OPEC group led by Moscow are currently negotiating such an entity.

    More at: https://oilprice.com/Energy/Energy-G...n-On-OPEC.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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  18. #705
    Saudi Arabia’s King Salman has approved a plan to ease levies businesses pay on foreign workers to help revive economic growth.Authorities will exempt some companies from paying the 2018 fees or reimburse those that have already paid, according to the official-Saudi Press Agency. To qualify for the aid, businesses need to have made strides in hiring more Saudi nationals.
    The fees were introduced in 2018 as part of a drive to increase non-oil government revenue -- a key goal of Crown Prince Mohammed bin Salman’s economic transformation plan -- but have drawn fire from business owners in a country accustomed to cheap foreign labor. They’ve contributed to the exodus of hundreds of thousands of expatriate workers, hitting the already-struggling economy without making much of a dent in Saudi unemployment.
    The government has allocated 11.5 billion riyals ($3.1 billion) for the plan, according to SPA. It aims to encourage companies that haven’t done enough to expanded their Saudi work force enough.
    About 350,000 companies would benefit from the decision, Al Eqtisadiah newspaper reported, citing people it didn’t identify.

    https://finance.yahoo.com/news/saudi...075236821.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  19. #706
    South Sudan is looking to pump more than 350,000 bpd of oil by the middle of next year, compared to current production of 140,000 bpd, South Sudan’s Oil Minister Ezekiel Lul Gatkuoth told Reuters on the sidelines of a conference in India.

    By the end of this year, South Sudan expects its oil production to nearly double from the current 140,000 bpd to 270,000 bpd, minister Ezekiel Lul Gatkuoth told Reuters. By the middle of 2020, the country aims to restore production to the pre-civil war levels, he noted.

    “We used to produce 350,000 to 400,000 bpd. We expect to go back to those levels by the middle of next year,” Gatkuoth told Reuters.

    More at: https://oilprice.com/Latest-Energy-N...-Mid-2020.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  20. #707
    Rosneft’s chief executive Igor Sechin wants Russia to quit its production control deal with OPEC, Reuters reported last week, citing sources that have seen a letter Sechin wrote to President Putin. According to the sources, Sechin sees the OPEC deal as a threat to Russia that benefits the United States, but the likelihood of his opinion leading to a pullout from the deal is limited.
    Sechin is one of the closest allies of Putin and one of the most powerful figures in Russian politics. As Forbes’ Kenneth Rapoza wrote last year, many politicians and big business executives seem willing to face Putin on a bad day. Less so are those willing to face Rosneft’s chief. What’s more, Sechin is not the only one unhappy with the OPEC deal.
    “The letter is a threat to the deal extension. But anyway, Putin is the ultimate decision maker,” one of the Reuters sources said. The perspectives of Russia’s President and the biggest players in its oil industry may differ here. For Putin, the OPEC deal is really a geopolitical tool rather than a tool for raising oil prices. Russia does not need prices higher. In fact, if they go too high, they will hurt the Russian economy. For the oil industry, however, it’s about the oil and the markets more than it is about geopolitics.

    More at: https://oilprice.com/Energy/Energy-G...OPEC-Deal.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  21. #708
    In an interview with the Financial Times published on Tuesday, Saudi Arabia’s Energy Minister Khalid al-Falih said that the Saudis would cut production to around 9.8 million bpd in March, some 500,000 bpd below the commitment in the OPEC+ deal that began in January.
    Under the OPEC/non-OPEC deal for a total of 1.2 million bpd cuts between January and June, Saudi Arabia’s share is a cut of 322,000 bpd from the October level of 10.633 million, to reduce output to 10.311 million bpd.
    At the end of January, al-Falih said that Saudi Arabia’s February crude oil production would likely be close to 10.1 million bpd, down from around 10.2 million bpd for January. Since December, Saudi Arabia has cut close to 1 million bpd in production and exports, and this “will trickle down the markets over the next few weeks,” al-Falih told Bloomberg Television in an interview at the end of last month.
    In his most recent interview, with the FT, the energy minister of OPEC’s largest producer and top global oil exporter also said that Saudi Arabia would be cutting its crude oil exports to near 6.9 million bpd next month, slashed from 8.2 million bpd just three months ago.

    More at: https://oilprice.com/Latest-Energy-N...roduction.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  22. #709
    OPEC’s biggest producer Saudi Arabia would need oil prices at US$80-85 per barrel in order to balance its 2019 budget, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), has told Reuters.
    Saudi Arabia’s officials, including Energy Minister Khalid al-Falih, don’t discuss publicly ‘targeted oil prices’ or a desired level of oil prices that would be comfortable to the Kingdom’s finances, but analysts and the IMF have estimates what oil price level would be enough to cover Saudi Arabia’s budget spending.
    For this year, “if you take the (2019) budget as presented with everything remaining equal, a breakeven point would be around $80-$85 dollars,” the IMF’s Azour told Reuters.
    The oil price slump in the fourth quarter of 2018 has certainly affected the public finances of the biggest oil exporting nations, including OPEC’s biggest, Saudi Arabia.
    Although Azour doesn’t see the price slump affecting the Kingdom’s ability to finance itself, he expects that those lower prices would weigh on the fiscal position of Saudi Arabia.
    For this year, the Kingdom announced its highest-ever budget, of around US$295 billion (1.1 trillion Saudi riyals). This breaks the previous record set in 2018, with budget spending at US$261 billion and it might spark concerns about the economy’s sustainability as the increase for 2019 includes a hefty bill for cost-of-living allowances introduced last year.
    Last month, the IMF slashed its forecast for Saudi Arabia’s economic growth this year to 1.8 percent, down by 0.6 percentage point from the previous economic outlook in October, due to lower oil prices and lower oil production growth.
    The IMF sees growth in Saudi Arabia for 2019 at 1.8 percent, compared to 2.4 percent expected last October, while it lifted its 2020 economic growth forecast by 0.2 percentage point from October to 2.1 percent.

    https://oilprice.com/Latest-Energy-N...19-Budget.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  23. #710
    Undeterred by the prospect of peak oil demand, Saudi Arabia is betting its long-term future on oil.
    Not only is Saudi Arabia pouring investment into lifting oil production capacity at home, but it may even, for the first time, venture abroad in order to grow its oil business. “We are no longer going to be inward-looking and focused only on monetising the kingdom’s resources,” Saudi oil minister Khalid al-Falih told the Financial Times in an interview. “Going forward the world is going to be Saudi Aramco’s playground.”
    Saudi Arabia’s oil reserves are so vast that Aramco has not really needed to look abroad for oil. At over 260 billion barrels, Saudi reserves are second only to Venezuela, although much cheaper to produce.
    In recent years, Saudi Arabia has had two somewhat contradictory strategies. On the one hand, Aramco has stepped up investment in both oil and gas, hoping to increase capacity in the years ahead. The projects were intended not only to offset depletion at aging fields, but also to increase spare capacity. Heavy investment would ensure Aramco’s – and the country’s – dominance in the oil market for years to come.
    At the same time, crown prince Mohammed bin Salman laid out an ambitious economic transformation agenda to diversify the Saudi economy away from oil. That involved growing the private sector, and using proceeds from the Aramco IPO to make a down payment on a new economy.

    MbS’ vision has largely stalled out, and his so-called domestic reforms have papered over a tightening dictatorial grip. Meanwhile, his adventures abroad – the war in Yemen, the blockade of Qatar, and the slaying of Saudi journalist Jamal Khashoggi – have tarnished his once-glittery image. The darling of the west until only recently, MbS squandered his (arguably unjustified) goodwill.
    Now MbS’ much-hyped “Vision 2030” is in tatters. The Aramco IPO was delayed, in part because top Saudi officials fear it would open up the company to too much scrutiny. The Wall Street Journal reported earlier this month that it might never happen.
    Instead, Saudi Arabia is going right back to its pre-MbS roots. Rather than diversifying, Saudi Arabia is going to look abroad for more oil. When asked by the FT if Saudi Aramco is looking to become an international player like ExxonMobil or Shell, al-Falih responded: “Correct.”

    The first item of business will be to create a “global gas” business. The FT noted that Aramco has discussed major investments in Russian and American LNG projects, while al-Falih mentioned Australia as a possibility.
    Aramco is also making a major bet on petrochemicals. Aramco is expected to turn to the bond markets to help pay for a $70 billion stake in Sabic, the Saudi petrochemical company.
    In other words, the economic transformation plan for the Saudi economy, envisioned by MbS, is starting to look not all that transformational. Saudi Arabia is hitching its wagon to oil and gas for decades to come. To be sure, the slight pivot into gas and petrochemicals is a strategy that not just Aramco is pushing. The oil majors, too, see gas and petrochemicals as a safer long-term bet than simply crude oil as peak demand nears.

    Nevertheless, doubling-down on oil and gas is ultimately an existential bet on the world not moving on from fossil fuels. The Saudi budget breaks even with crude oil north of $80 per barrel. Brent has traded below that threshold for most of the last five years. Oil prices could certainty rebound above that level, but only the most bullish forecasters believe Brent will consistently trade above $80 in the years ahead.

    More at: https://oilprice.com/Energy/Energy-G...et-On-Oil.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  24. #711
    Baker Hughes reported an increase in the number of active oil and gas rigs in the United States this week.
    The total number of active oil and gas drilling rigs rose by 2 rigs, according to the report, with the number of active oil rigs increasing by 3 to reach 857 and the number of gas rigs decreasing by 1 to reach 194.
    The oil and gas rig count is now 76 up from this time last year, 59 of which is in oil rigs.

    The EIA’s estimates for US production for the week ending February 8 shows that US producers are holding their production rates fast at an average rate of 11.9 million bpd*—a record for the US—for the fifth week in a row.

    More at: https://oilprice.com/Energy/Energy-G...ices-Hold.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindÖitís people I canít stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

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