Trump says oil production could be cut by as much as 15 million barrels

The Hill ^ | 04 02 2020 | Rachel Frazin

[yesthatjallen]

President Trump on Thursday said that there could be a drop in international oil production of 10 million to 15 million barrels as the U.S. oil industry is hit by plunging prices linked to international disputes.

"Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" he tweeted, referring to Saudi Crown Prince Mohammad bin Salman.

"Could be as high as 15 Million Barrels. Good (GREAT) news for everyone!" he added.

Russia recently declined to join the Organization of Petroleum Exporting Countries (OPEC) members in agreeing to cut production in response to less demand from the virus.

After that, Saudi Arabia decided to increase its own production, flooding the market. The country's state-owned oil company said last month that it would increase its production by 300,000 barrels per day.

SNIP

[Candor7]

Exactly what the Russians and Saudis want.

[Buckeye McFrog]

The builder from Queens is apparently a better diplomat
than the entire striped pants crowd in Foggy Bottom.

[Jewbacca]

The United States is the largest producer of oil in the world.

Also a net exporter.

A healthy oil price is a net win for the USA.

[ConservativeMind]

True, but the cut would have to happen, anyway, because there’s no room for storing the new oil coming out of the ground.

I like that Trump gets credit for it, but it’s better to have cheap fuel.

[Jewbacca]

China, btw, is the largest net importer.

High or even fair priced oil hurts them the most.

[ConservativeMind]

No, an inexpensive price is far, far better.

You probably think more taxes is better, because it makes government bigger by employing more people.

[Jewbacca]

No to both your questions.

Now two years ago, you’d be correct. And you are correct for my home country of Israel, which is a net importer.

But the US is a net exporter, so a middling price is best for the USA. Large percentage of the US economic miracle is due to oil production being healthy.

[nwrep]

I think the argument is that a certain minimum price is needed to sustain production. We have to think in terms of both production and consumption, and not only consumption.

[proust]

Yay! Gotta keep that “jobs program” going. Meanwhile, we stay at the bottom of the barrel (no pun intended) with higher gas prices.

[mewzilla]

If we stopped refining foreign oil, would we still need to cut production, anyone know?

[TermLimits4All]

Yea it would be horrible for Americans to be able to purchase gasoline for a cheap price./s

[TermLimits4All]

Exactly. I guess all those wanting higher prices have much more money than we do, they can afford inflated prices for gasoline.

[nascarnation]

I see Texas is down to a buck ten but we’re still in the $1.45 range here in Indiana.

[SunkenCiv]

President Trump on Thursday said that there could be a drop in international oil production of 10 million to 15 million barrels as the U.S. oil industry is hit by plunging prices linked to international disputes... Russia recently declined to join the Organization of Petroleum Exporting Countries (OPEC) members in agreeing to cut production... After that, Saudi Arabia decided to increase its own production, flooding the market.

Apropos of nothing, one of the great joys of getting older and being home more is the opportunity to pop off with some poorly thought-out comment in an FR topic before reading past the headline.

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• Oil prices surge nearly 10% after Trump says Russia-Saudi feud can be resolved
• Stock futures jump ahead of big jobless claims report as oil rebounds 10%

[Mr Ramsbotham]

Paradoxically, though, if the economy is to recover, cheap energy will be a must.

[nascarnation]

I’m no expert, but perhaps 40 dollar oil would be a good median between the 60 dollar oil we had to start the year and the 20 dollar oil we have now?

[edh]

I recalled reading that the USA relies on oil being @ $40/barrel since it is harder for us to extract. That price might have gone down due to improvements in technology.

[proust]

"I've got great news, Forgotten Man!"

[Mouton]

The mechanics of “fair” oil price have to do with the high cost of producing certain types of oil. Fracking shale is one of the most expensive to produce. Some firms, like OXY, claim they make money only over about 40 per barrel. Others are far higher. Domestically we do not have large reservoirs of pool oil. Our oil boom is a direct result of fracking. There is a tremendous volume of oil being produced, even with OPEC controls running and with a few countries out of the market like Venezuela due to socialism there and Iran with sanctions (not considering the cheating as oil is fungible). Yet, large projects are coming on stream, notably XOM’s in Guyana and some large plays in western africa. The Saudi and Russia play was designed to drive the US out of the export market and they demonstrated they can destroy our industry if they continue. The oil will still be there but you have to have an industry that can produce it, pay bills and make a profit. Everything else is conversation.