... interest rate, putting pressure on oil prices. In response, producers may cut production still further in an attempt to support prices, forming a sort of a vicious circle. To put pressure on Saudi Arabia and other producers, the U.S. could pass the NOPEC
(No Oil Producing and Exporting Cartels Act)
, which would allow the U.S. to impose sanctions on OPEC+ nations under the pretext of antitrust violations. This will cause a backlash down to the imposition of an embargo and a repeat of the 1973 energy crisis....
... prematurely, announced via Twitter that Saudi Arabia and Russia appeared
ready to compromise
on production cutbacks. But some analysts warned that the Saudis seemed "
much more measured
" in their statements.
Russia has withdrawn
from the OPEC+ deal among oil-producing nations to cut production and regulate the market, and Saudi Arabia announced earlier this week it would increase its oil output. The breakup not only sent the market into a spin, but it also triggered a controversial reaction in Russia....
... complicated by the Iraqi government’s lack of jurisdiction over Iraqi Kurdish oil contracts. In short, Russia has a major opportunity at the August 7-8 Abu Dhabi summit to emphasize its unequivocal commitment to obtaining universal compliance amongst OPEC member states with oil production quotas. Achieving this level of compliance will be difficult in the near-term due to Iraq’s reconstruction efforts, Ecuador’s refusal to back OPEC quotas and collapsing production in Venezuela. However, if Moscow can successfully ...
... new alliance, while reassuring the latter that their respective countries have important new partners. We may, therefore, assume that the recent intensification of Russian-Saudi energy dialogue is nothing more than a forced temporary friendship.
1
.
OPEC Monthly Oil Market Report – November 2016
, pp 44, 57.
... commentators regard Saudi Arabia’s current oil policy as a significant deviation from the previous OPEC formula of coordinated
output cuts and higher prices
.
In a recent peer-reviewed paper, Jeff Colgan examined the behavior of OPEC and non-OPEC oil production in detail
[3]
. The data revealed that the output decisions of OPEC members, with the exception of Saudi Arabia (we return to this below), were statistically indistinguishable from those of non-OPEC members, once one controls for the technical ...
... announced, the Brent oil benchmark dropped 6 per cent to $40 a barrel, though it later improved. Prices are unlikely to fall below $35 a barrel in the coming weeks, as there are factors which prevent panic from creeping into the market. For instance,
oil workers in Kuwait (OPEC’s third largest producer) began an open-ended strike on April 17
to protest proposed cuts in their wages, benefits and incentives. The strike has already slashed daily crude production by more than 60 per cent as of
in April 2016 to 1.1 million ...
..., it has to be noted that on January 11, 2016 (production is expected to be frozen at the level reached during this period), production hit an
all-time high
: Russia was producing 10.9 million barrels a day; Saudi Arabia 10.091 million barrels; and OPEC 32.3 million barrels, far in excess of its quota. So, even if the agreement comes into force, no serious price growth should be expected, and there will still be an oil glut in the market.
Even if the agreement comes into force, no serious price growth should be expected, and there will still be an oil glut in the market.
Second, Iran’s refusal to join the initiative makes it much less likely that oil producing ...
... is entirely probable in the current situation. Despite artificially high supply, the market will find a way to stabilize on its own.
1
. Amy Harder. U.S. Congress Considers Lifting Crude Oil Export Ban // The Wall Street Journal, August 10, 2015.
2
. OPEC oil monthly report. June 10, 2015.
3
. CEEMEA Equity Research. July 23, 2015.
... also single out rising volatility and falling US Treasury yields as other contributing factors.
In theory the global oversupply of oil should correct itself as low oil prices force investment in new drilling capabilities down, but this time the major oil producer OPEC has instead increased output by about 1.5mln bbl per day since February, an amount equal to year’s increase in global demand. Russia also stepped up its daily production to 10.713mln bbl setting a post-Soviet output record.
Once the energy ...
... of people oppose the revision of the environmental standards that would inevitably follow legislative changes lobbied by the oil corporations.
This opposition notwithstanding, the abolition of the energy policy act appears more possible than ever before,... ... global energy market and the entire network of trade links are in for major changes. Expect the weakening of an emasculated OPEC and more competition for individual energy giants, i.e. Russia, Saudi Arabia, Iran, Nigeria and others, who will face much ...
