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U.S. oil boom divides OPEC
Marketwatch ^ | May 28, 2013, 7:06 a.m. EDT | By Benoit Faucon, Sarah Kent and Hassan Hafidh

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 shale’s oil’s 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 ...


TOPICS: Business/Economy; Canada; Foreign Affairs; Israel; Mexico; News/Current Events; Russia
KEYWORDS: algeria; canada; energy; israel; mexico; nigeria; oil; opec; russia

1 posted on 05/28/2013 11:00:19 AM PDT by Ernest_at_the_Beach
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To: Ernest_at_the_Beach

Why is oil 95 bucks a bbl then?


2 posted on 05/28/2013 11:02:28 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: Ernest_at_the_Beach

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.


3 posted on 05/28/2013 11:03:31 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: Ernest_at_the_Beach

4 posted on 05/28/2013 11:06:49 AM PDT by thackney (life is fragile, handle with prayer)
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To: central_va

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 spending—including for roads, jobs and housing—according to the International Monetary Fund.

http://online.wsj.com/article/SB10001424127887323855804578508871186460986.html


5 posted on 05/28/2013 11:08:33 AM PDT by thackney (life is fragile, handle with prayer)
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To: Ernest_at_the_Beach

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.


6 posted on 05/28/2013 11:10:04 AM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: thackney

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.


7 posted on 05/28/2013 11:16:49 AM PDT by woodbutcher1963
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To: Ernest_at_the_Beach; thackney; BOBTHENAILER
Hey! Please keeps sendin me pings to these threads, too! I like 'em!! Besides, I needs da energy!!!

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!!!

8 posted on 05/28/2013 11:17:59 AM PDT by SierraWasp ("Bitter Ender," "Bitter Clinger," Yes on both. COUNT ME IN!!! I love God and guns, but not gays!!!)
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To: Vigilanteman

Better shut it down, quick, Baraq!


9 posted on 05/28/2013 11:19:12 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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Working on the last 10%!!
Woo hoo!!
Less than $6.7k to Go!

We can do this!!
FReepers ROCK!!

10 posted on 05/28/2013 11:20:32 AM PDT by RedMDer (You are Free Republic. There are no outside influences. Just us, all of us. Please donate today!)
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To: woodbutcher1963
Yes, they have restored Iraq's production.

But world consumption of oil is climbing as well.


11 posted on 05/28/2013 11:21:19 AM PDT by thackney (life is fragile, handle with prayer)
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To: central_va

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


12 posted on 05/28/2013 11:22:12 AM PDT by SeminoleCounty (GOP - Greenlighting Obama's Programs)
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To: Ernest_at_the_Beach

What about the super top secret Halliburton pipeline in Afghanistan and the oil we are stealing from Iraq? How does that figure into this?


13 posted on 05/28/2013 11:30:16 AM PDT by VanDeKoik
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To: central_va

Because the old mighty buck isn’t worth a buck anymore.


14 posted on 05/28/2013 11:33:49 AM PDT by Captain PJ (Are we there yet?)
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To: central_va

Why is oil 95 bucks a bbl then?

they think it’s a fair price ?


15 posted on 05/28/2013 11:35:06 AM PDT by molson209
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To: SeminoleCounty
A lot of that middle east crude is not sweet.


16 posted on 05/28/2013 11:38:22 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

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.


17 posted on 05/28/2013 11:57:52 AM PDT by woodbutcher1963
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To: Ernest_at_the_Beach

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.


18 posted on 05/28/2013 12:00:42 PM PDT by Tenacious 1 ("The British are Coming (to confiscate weapons)" - Paul Revere (We know how that ended))
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To: familyop
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.

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?

19 posted on 05/28/2013 12:03:03 PM PDT by Tenacious 1 ("The British are Coming (to confiscate weapons)" - Paul Revere (We know how that ended))
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To: SierraWasp

You make me laugh....hope things are going well.


20 posted on 05/28/2013 12:22:30 PM PDT by Ernest_at_the_Beach (Just who is McCain visiting with?)
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To: SeminoleCounty; SierraWasp
I think the goings -on in Syria have caused a big War Premium in crude also.

McCain was in Syria for a few hours yesterday,...and the Euros are lifting the weapons embargo for the rebels....and the a Senate committee has voted funds for the Sunni rebels in Syria.

Russia said OK we are sending more S-300 missiles to Assad.

21 posted on 05/28/2013 12:29:05 PM PDT by Ernest_at_the_Beach (Just who is McCain visiting with?)
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To: Comrade Brother Abu Bubba

How high will oil go, Comrade Bubba?!


22 posted on 05/28/2013 12:29:56 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: woodbutcher1963
What oil(forgetting transportation cost to refinery and the danger to life and limb of getting it from its source)is worth the most?

Keep in mind, the transportation cost, and lack of sufficient transportation capacity greatly effects the price of oil at location. The exact same oil today, at different locations can vary in price by over $20. light sweet crude

In general, that is the most desired. But light can become so light that it losses value. In general, something approaching near gasoline tends to be the most valuable. But if it is so light it is mostly butane, it will not bring top dollar.

Is Quaker State, ie Penn St crude oil still the best?

I don't know that was ever true outside of commercials.

US mars - Shell's production from Ursa, Mensa and Mars offshore platforms commingles with Amberkjack pipeline volumes to create MARS BLEND crude in the caverns at Loop. It is a large enough volume to get traded as a commodity. All of these are contract agreements that not only determine quality, but also location of delivery. Adders/discounts to prices tend to be standard for known quality changes and/or different delivery locations. Mars is 30.3° API gravity and 1.91% sulfur delivered to the Loop. (Louisiana Offshore Oil Port)

LLS - Louisiana Light Sweet is 35.6° (lighter than Mars) and 0.37% sulfur (sweeter than Mars) delivered to St James, Louisiana (also gulf coast)

US-WTI is the price you normally hear quoted, when the news generically talks about the price of oil. It is West Texas Intermediate, 39.6° (lighter than LLS) and 0.24% sulfur (slightly sweeter than LLS) delivered to Cushing, OK. This location has become bottle-necked due to the shale oil production, too much coming into one location. It has created a discount in the WTI price even while the demand for it has climbed, because the supply has climbed faster.

http://en.wikipedia.org/wiki/List_of_crude_oil_products

23 posted on 05/28/2013 12:32:34 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

So what comes out of the northern Alberta sands?

Also, what comes out of the Balken, ND & MT?


24 posted on 05/28/2013 12:48:44 PM PDT by woodbutcher1963
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To: woodbutcher1963

Keep in mind, you can get far different qualities of oil from the same surface location but different fields at different depth below ground. There is no set rule all are the same in an area. The fields are from sediment 10s of millions of years apart. Far different conditions exist in these time periods and produce different oils. Also the “cooking” time tends to be less in shallower fields resulting in heavier oils from nearer time periods.

The oil sands are “young” or more exactly “less thermally mature”, ie less cooking has been done. They technically don’t produce oil but rather Bitumen. Very heavy but also with a lot of BTU’s per barrel. It can be cooked or processed (thermally cracked) to produce lighter more valuable hydrocarbons more suited for transportation fuel. Some of this is done on or near site with an upgrader, producing a synthetic crude, or it is diluted with something like Naptha or Natural Gas Liquids (butane, propane) to get in thin enough to pump to a refinery, where they do the same cracking.

The Bakken shale play produces Light Sweet Crude, 41° (very light without being too light) and 0.2% sulfur (very sweet). Their problem is the pipeline bottlenecks, including to Cushing, OK. Today more of the Bakken oils moves out of state by rail than by pipeline.


25 posted on 05/28/2013 1:00:37 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney; Ernest_at_the_Beach

It was due to the high parafin content in PA oil, right? That’s what I always heard.


26 posted on 05/28/2013 1:00:59 PM PDT by SierraWasp ("Bitter Ender," "Bitter Clinger," Yes on both. COUNT ME IN!!! I love God and guns, but not gays!!!)
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To: woodbutcher1963

I should have said, the Alberta oil sands produces Athabascan Bitumen. It is 7.7~9.0° API. 10° is water density so this stuff is so heavy it sinks, not floats in water. The sulfur also tends to be high, 4.4~5.4% sulfur.

http://www.etc-cte.ec.gc.ca/databases/Oilproperties/pdf/WEB_Athabasca_Bitumen.pdf

Some locations will have different values but Alberta sands tends to be quite thick and sour.

Over 450 different oils listed at:
http://www.etc-cte.ec.gc.ca/databases/Oilproperties/


27 posted on 05/28/2013 1:06:03 PM PDT by thackney (life is fragile, handle with prayer)
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To: SierraWasp

So says Wikipedia:

Pennsylvania grade crude oil is thermally stable and has a high viscosity index. It is generally free of asphalt and has only trace amounts of sulfur and nitrogen. It is also high in paraffin and other waxes making it highly desirable for refinement into petroleum lubricants such as motor oil. Its products are also valuable for use in certain hydraulic applications. By-products are commonly found in consumer goods such as cosmetics, and topical ointments.

But since they don’t site sources, I’m not sure this more than gossip, possible just stuff from commercials.


28 posted on 05/28/2013 1:10:15 PM PDT by thackney (life is fragile, handle with prayer)
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To: Tenacious 1
$45 to $50 barrel is my guess too. $50 per barrel is not feasible for fracking so this number most likely to settle. Easy to forget avg oil price history is 30 per barrel.
29 posted on 05/28/2013 1:18:56 PM PDT by Orange1998
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To: Ernest_at_the_Beach
McCain was in Syria for a few hours yesterday,...and the Euros are lifting the weapons embargo for the rebels....and the a Senate committee has voted funds for the Sunni rebels in Syria.

Senator McCain has nevere seen a war that we shouldn't be involved in. Usually, on the wrong side...

30 posted on 05/28/2013 1:24:38 PM PDT by okie01 (The Mainstream Media: IGNORANCE ON PARADE --)
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To: thackney
"Today more of the Bakken oils moves out of state by rail than by pipeline".

Courtesy of Buffet. My guess the TransCanada will be delayed for sometime because of the Buffet/Obama connection.

31 posted on 05/28/2013 1:25:59 PM PDT by Orange1998
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To: Captain PJ

Because the old mighty buck isn’t worth a buck anymore.
..........
Yeah but with rising US oil production—the dollar is rising —which puts downward pressure on oil and gold.


32 posted on 05/28/2013 3:24:51 PM PDT by ckilmer
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To: central_va
Why is oil 95 bucks a bbl then?

Because the currency you're using to buy oil has only 40% of the purchasing power it did in 1981. The price is set on a world market, and exporters increase the per barrel price as necessary to maintain the purchasing power of the emaciated, weak dollars they are taking in exchange for their oil.
33 posted on 05/28/2013 4:06:35 PM PDT by Milton Miteybad (I am Jim Thompson. {Really.})
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To: familyop

The 95 to 115 range bandied about is not production cost; but, attributed toward needed revenue to dispense thus maintaining political stability.


34 posted on 05/28/2013 4:26:26 PM PDT by Ozark Tom
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To: Ozark Tom

Thanks. Very interesting.


35 posted on 05/28/2013 6:14:51 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: thackney
Venezuela’s oil minister said on Monday that he would push for a cut in OPEC production...,but then stated, sotto voce, that they'd secretly break the quota limits so as to maximize profits.
36 posted on 05/28/2013 7:21:48 PM PDT by 1010RD (First, Do No Harm)
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To: thackney

I was at a meeting with some RR execs and a RR car leasing agent. He said tankers were a boom. They couldn’t make enough. Was he exaggerating?


37 posted on 05/28/2013 7:31:06 PM PDT by 1010RD (First, Do No Harm)
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To: Ernest_at_the_Beach; AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; ...

Thanks Ernest.


38 posted on 05/28/2013 8:03:31 PM PDT by SunkenCiv (Romney would have been worse, if you're a dumb ass.)
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To: Tenacious 1
"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). "

The ideal time to top off the Strategic Petroleum Reserve.

I wonder if comrade obama has replaced any of the taxpayer's oil that he extracted from the SPR and then resold to the taxpayers.
39 posted on 05/29/2013 1:12:52 AM PDT by clearcarbon
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To: 1010RD

I’ve heard they cannot build tanker rail cars fast enough to meet demand.

Tank car boom masks dearth of orders for other rail cars
http://www.progressiverailroading.com/mechanical/article/Tank-car-boom-masks-dearth-of-orders-for-other-rail-cars-8212-analysis-by-Toby-Kolstad—36142

Tank-car orders will jump, but demand for other car types will remain flat or decline in 2013
http://www.progressiverailroading.com/rail_industry_trends/news/Tankcar-orders-will-jump-but-demand-for-other-car-types-will-remain-flat-or-decline-in-2013-Economic-Planning-Associates-says—36000


40 posted on 05/29/2013 4:58:27 AM PDT by thackney (life is fragile, handle with prayer)
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To: clearcarbon

The 1 million barrels Marathon borrowed last year has been replaced, but the previous 2011 sale of oil (30 million) has not.

U.S. Ending Stocks of Crude Oil in SPR
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCSSTUS1&f=M

STRATEGIC PETROLEUM RESERVE
http://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve


41 posted on 05/29/2013 5:05:24 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Mirrors their words exactly. It looks like an economy that is booming in certain markets and among crony markets (rhymes with phony) being goosed by the government.

The feedback I get from clients and suppliers along with other businesses is their orders are up and down. Some have seen their best year in a decade, while others their worst.


42 posted on 05/29/2013 5:10:44 AM PDT by 1010RD (First, Do No Harm)
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