RE:RE:RE:$39 oil very soonGashole1 wrote: Nessrookie wrote: Hopefully after the EIA next week. Just before the OPEC meeting. They are now forced to decide if they want $30 oil for the next year or cut. Market is very clear that if they would have froze in April and even let Iran return to normal the market would be in a deficit again. Instead they slit their own throuts. US production was actually up this week including the lower 48. Their strategy failed because America got richer and shale figured out how to survive. Venezula is headed to civil war, Nigeria is almost done and eventually the kings of OPEC can't pay their people to stay in charge. Next Friday is a come to Jesus moment for all of them including Russia. Even a freeze means nothing now. They are forced to cut or keep bleeding They can no longer say the market is correcting itself. If they at least refuse to freeze the market could easily go back to a 1.5 barrel surplus per day
Opec are still increasing production as north america drops. opec output at all time highs, and now they are going to cut? I think not... Saudis plan is not fulfilled yet, and they dont care who they hurt as long as they survive... they said in the past they will defend their market share for oil. They dont care where the cuts come from, but it just wont be them. It might be other opec memebers going bankrupt, they dont care where it comes from as long as they keep producing what they are today or more... Venezuala might drop to zero, Saudis dont care.
The Saudis have already reclaimed their market share and have once again become the top producer of crude oil in the world...but it has cost them. They are hurting big time. Just look at how they are powering through their sovereign wealth fund. They want higher prices now but obviously not at the expense of market share, which was the whole point of this glut. They don't care about producing more, they just want to retain their current market share but with a higher price. They are ready to freeze/cut but not unless everybody else is on board. Otherwise, they lose market share and that defeats their purpose. They can't produce much more as it is. They are already pumping at record levels. Bottom line is that the Saudis are ready to end this low price environment but certainly aren't going to freeze/cut production on their own and let others pump away at higher prices while they lose market share. US production has fallen sharply and will continue to do so because of the lack of investment. Demand is not weak, people! It is solid. We are getting close to the end of this thing and the Saudis have almost had enough. I can assure you almost every other oil producing nation has already.