Skip to comments.U.S. oil boom divides OPEC
Posted on 05/28/2013 11:00:19 AM PDT by Ernest_at_the_Beach
LONDON (MarketWatch) Rising American output of shale oil is rewriting global trade patterns and deepening fault lines within the Organization of the Petroleum Exporting Countries, limiting its ability to mount a collective response. A crucial OPEC meeting in Vienna on Friday will mark the first stage of a debate on shales oils impact.
The meeting is unlikely to lead to a change in production levels, several OPEC delegates said but inaction would set the stage for a future showdown. We are heading toward some problems, a delegate from a Persian Gulf OPEC member said.
Oil output from the U.S. and Canada is set to rise about 21% from this year to 2018, according to data from the International Energy Agency, largely a result of growing production from fracking and other technologies that access once-inaccessible reserves.
African OPEC members such as Algeria and Nigeria which produce oil of similar grade to shale oil are suffering the worst effects from the North American oil boom; Nigeria oil minister Diezani Alison-Madueke deemed U.S. shale oil a grave concern.
(Excerpt) Read more at marketwatch.com ...
Why is oil 95 bucks a bbl then?
Quick, give some more money to the Sierra Club or call in chits from the ObaMao adminisstration to surpress domestic production in the U.S.A. and Canada.
While Saudi Arabia can tolerate lower prices, “there will be some members, like Venezuela, Iran who will struggle at $90,” said Amrita Sen, chief oil analyst at London-based Energy Aspects Ltd. The front month Brent contract for July settled at $102.62 a barrel Monday. Venezuela’s oil minister said on Monday that he would push for a cut in OPEC production if oil falls below $100 a barrel.
Iran needs high prices to offset the loss of $26 billion of oil revenue last year from tough Western sanctions on its exports, according to estimates from the U.S. Energy Information Administration.
Algeria, which has been rattled by riots over food and housing, needs an oil price of $121 a barrel to cover planned domestic spendingincluding for roads, jobs and housingaccording to the International Monetary Fund.
From a look at few years ago, most of the oil producers in the Middle East needed from about $85 to $95 dollars per barrel to break even.
Should there not be a pretty big increase in production from Iraq coming on the market?
That is if they stop blowing themselves up because of some Sunni/Shite grudge from 800 years ago.
You and thackney keep me well informed and I just love it when you guys just wipe the floor with all those "alternative energy" bufoons with your factual posts, pings and realistic comments!!!
Then BOBTHENAILER comes around and gives 'em GAS!!! Hoo boy!!! What a hoot!!!
Better shut it down, quick, Baraq!
It may still be high due to refining.
I wonder all our new domestic production is easy to refine. The sweet crude from the Islamic states is usually the easiest to refine....while the Venezulan oil is tough to refine (which probably curtailed a lot of Chavez nuttiness....they had to refine their oil outside country)
Also...shale and tar sands oil costs more to extract
As long as the Islamics, Free Trader Globalists, and the enviros don’t gang up to stop domestic production (those three will try...guarantee)...petrol should drop if the free market is allowed to run course
What about the super top secret Halliburton pipeline in Afghanistan and the oil we are stealing from Iraq? How does that figure into this?
Because the old mighty buck isn’t worth a buck anymore.
Why is oil 95 bucks a bbl then?
they think it’s a fair price ?
Forgive my ignorance to Petroleum Engineering.
What oil(forgetting transportation cost to refinery and the danger to life and limb of getting it from its source)is worth the most?
light sweet crude
Is Quaker State, ie Penn St crude oil still the best?
Where does Canadian shale oil fit on this graph?
Please define US- mars, US-LLS, US-WTI. Keep in mind I am a lumber trader and just barely passed inorganic chemistry.
Don’t tell them this. But there is a brilliant strategic move OPEC could make that would SLOW the tidal wave of petroleum production they see coming. This is a secret....
If they were to significantly ramp up production and drive the price of a barrel of oil down to about $40/barrel, the shale development and several other processes would be too expensive to bring oil to market (at least for new ventures). They would have to wait out the market before driving it back up.
Here’s the crutch for them. They would have to accept a low ROI and potentially even some profit loss for a while to stave off the onslaught. They would have to compete (uh oh). But they do have the power right now to affect supply and demand (at least for a little while longer) to the extent that they can manipulate the futures markets.
Don’t worry, they would never dream of doing this.
I am skeptical of those numbers. I'm not sure if those numbers are based on current Vs. historic value of the dollar or what. But that seems extremely high. I would think that number would be closer to $45 or $50/ barrel. But I'm no expert. Do you have any source recommendation for that?
You make me laugh....hope things are going well.