Interesting article on pulling fossil fuel subsidies

Thanks for fessing up! Tiny keeps running circles around you when it comes to oil and energy. He is the Daniel Yergin of eccie. Originally Posted by lustylad

Thanks for that. As implied by WTF, Captain Midnight's been serving up my severed head on a silver platter in another thread about economics. So this was a timely boost to my self esteem. I can't match you gentlemen in economics but I do know something about oil and gas.

Speaking of fools, maybe you should ask Jimmy Carter if gas prices matter in the short run. Originally Posted by lustylad

That's exactly what popped into my mind when bf0082 was lecturing about how there's no point in building a pipeline because the price of oil is going to fall through the floor. I'm not saying bf0082 is a fool. But Carter, given he was the leader of the free world with access to all the resources of the federal government, was, on this anyway. He had us exploiting our highest cost gas resources, at depths greater than 15,000', while leaving shallower deposits that were much cheaper to exploit in the ground. And starving the gas producers of capital by maintaining price controls at low levels on gas from existing wells. If he'd left things up to the market we would have been a lot better off.

As a nation we cannot expect a company to sink billions into an approved project only to have it pulled out from them. Originally Posted by Muy Largo

We wholeheartedly agree on that. Thanks for the background on the project.

Still Funny no 2 way news conf fro pudding and chief about well this or ANYTHING just fucking Brilliance

Russia and Saudi Arabia tried to drive prices down so they could force the shale producers out of business then jack prices sky high again.

. Originally Posted by Tiny

That never made sense to me ... wtf do they think is going to happen when prices go back up?

I readily admit I did not understand that.

I did buy oil stocks on the dip though....and mid streams.

So thank you Russia and SA.

No that the middle east

That's exactly what popped into my mind when bf0082 was lecturing about how there's no point in building a pipeline because the price of oil is going to fall through the floor. I'm not saying bf0082 is a fool. But Carter, given he was the leader of the free world with access to all the resources of the federal government, was, on this anyway. He had us exploiting our highest cost gas resources, at depths greater than 15,000', while leaving shallower deposits that were much cheaper to exploit in the ground. And starving the gas producers of capital by maintaining price controls at low levels on gas from existing wells. If he'd left things up to the market we would have been a lot better off. Originally Posted by Tiny

I'm confused in your argument, you don't want to purchase oil at $40, but produce it nationally for $60 ?

You literally go against every graph of economics possible, we wouldn't be able to export our oil, since the prices between both are so different, we would only be able to use it nationally, increasing cost thru the roof in order to make profits, on what they drilled themselves and including their losses on what you won't allow them to purchase from the middle east, it would literally cause gas per gallon to hit $10 and always increase.

Sounds like Tiny is in favor of government controlled regulations and market manipulation.....

https://www.yahoo.com/news/opec-oil-...060618780.html

Jennifer Hiller
Wed, March 3, 2021, 1:06 AM


The pandemic destroyed a fifth of global fuel demand, and numerous shale companies declared bankruptcy, while others arranged mergers to offload debt. Frustrated investors sent energy-related stocks slumping throughout 2020.

While shale executives expressed concern about reopening the wells too quickly, OPEC nations are expected to ease supply curbs at their meeting later this week, without having to look over their shoulder at shale.

"The worst thing that could happen is that U.S. producers start growing rapidly again," said ConocoPhillips Chief Executive Ryan Lance.

The market widely expects OPEC to ease production cuts, which were the deepest ever, by around 1.5 million barrels per day (bpd), with OPEC's leader, Saudi Arabia, ending its voluntary production cut of 1 million bpd.

At CERAWeek, OPEC vs. shale is often discussed as a showdown between competing interests, but the dynamic of Texas vs. the Middle East is nearly invisible this year. Just one panel discussion in a five-day schedule focused on shale. Neither the Exxon or Chevron CEOs mentioned shale during their talks. Both companies have cut spending in the U.S. Permian Basin.

Crude on Tuesday topped $60 per barrel, up from $44.63 at the start of December, high enough to bolster U.S. producers' earnings given recent cost cuts.

In the past, rising prices have enticed shale companies to ramp up production even after they promised prudence, and $60 oil would have once prompted companies to rush drilling rigs and frack fleets back to work. That is not happening now.

"They are not taking the bait," LeBlanc said.

Private companies are likely to increase oilfield activity, but not enough to meaningfully boost U.S. output, said LeBlanc, adding that U.S. spending is likely to remain around $60 billion, flat with 2020, as companies prioritize shareholder returns.

"The severe drop in activity in the U.S. along with the high decline rates of shale and the pressure from investment community to maintain discipline instead of growth means in my view that shale will not get back to where it was in the U.S.," said Occidental Petroleum CEO Vicki Hollub.

Every mention of Oil by Tiny and friends Contradicts everything Oil Companies are doing, yet they get praise like they have any knowledge of whats good for the USA, SMH, facepalm.

You don't get it. Global oil prices are not set by the cost structure of the cheapest provider. If that was the case, we never would have built all those incredibly expensive offshore rigs.

Oil prices are set by world supply and demand. Global consumption last year fell from 100 million bpd to roughly 91 million bpd due to the pandemic. Since oil is an undifferentiated commodity for which demand is highly inelastic (at least in the short run), it only takes a slight imbalance between supply and demand to result in a very large movement in prices. Originally Posted by lustylad

In 2019, the U.S. imported 9% of the petroleum it used, the lowest since 1957. The largest sources of U.S. imported oil were: Canada (49%), Mexico (7%), Saudi Arabia (6%), Russia (6%), and Colombia (4%).[10]

Can't be true, the pipeline hasn't been completed yet, facepalm.

Russia and Saudia Arabia obviously have the ability to overproduce the market and control prices, so does Iran and Iraq.
Saudi -12M/day
Russia -11M/day
USA -12M/day
Iraq - 5M/day
Iran -3.6M/day
Venez. -2M/day

Saudi Arabia has the cheapest cost to extract oil, various other countries are expensive, like Canada, USA, Nigeria, etc.

lustylad = you want us to believe if the price of oil is low, these other countries with higher costs will continue to extract oil and lose money, if its costing more to export than to leave it in the ground ? Thats absurd, and only feasible on an extremely short term basis with the hopes oil rebounds and profits can be earned again.

World's Top 10 Oil Exporters
By ALEXANDRA TWIN
Updated Oct 23, 2019

1. Saudi Arabia
2. Russia
3. Iraq
4. Canada
5. United Arab Emirates
6. Kuwait
7. Iran
8. United States
9. Nigeria
10. Kazakhstan

briefly, in June, the U.S. eclipsed Saudi Arabia in monthly oil exports (as a result of a spike in shale production) before ceding the top spot to the longtime leader. Currently, the U.S. places third after Saudi Arabia and Russia, in terms of annual oil exports by country. However, the U.S. is expected to take over the runner-up spot from Russia, placing second in a list of all exporters on an annual basis by 2024, according to forecasts from the International Energy Agency.



https://www.investopedia.com/article...-exporters.asp

Below is a list of the top 10 oil-exporting countries based on data for all of 2018. These countries account for two-thirds of total global oil exports.

Saudi Arabia leads the list, responsible for 16.1% of global oil exports in 2018, for a total of $182.5 billion in value.
Russia is second on the list, responsible for 11.4% of global oil exports, for a value of more than $129 billion.
Iraq, Canada, United Arab Emirates, Kuwait, Iran, the United States, Nigeria, and Kazakhstan make up the rest of the top ten.
1. Saudi Arabia
Officially known as the Kingdom of Saudi Arabia, the country of Saudi Arabia is the world's number one oil exporter. Formed in 1932, the country was responsible for 16.1% of global oil exports in 2018, totaling $182.5 billion in value. The country is located on the Arab peninsula and is comparable in size to Alaska.


2. Russia
The massive, transcontinental country of Russia is the world's second-largest oil exporter. In 2018, Russia's oil exports accounted for 11.4% of global oil exports, exceeding a value of $129 billion. As a size comparison, Russia is twice as large as the entire United States.


3. Iraq
Initially formed in 1932, Iraq is the world's third-largest exporter of oil. In 2018, Iraq exported $91.7 billion worth of the commodity, which accounts for 8.7% of global exports. Located in the Middle East, Iraq is comparable in size to California.

#1
Crude oil was the world's top export product in 2018.

4. Canada
The northernmost nation in North America, Canada is the world's fourth-largest exporter of oil. In 2018, the country exported $66.9 billion worth of the commodity, or 5.9%. Due to the size of the Athabasca oil sands, it is estimated that Canada has more than 10% of the world's oil reserves.

5. United Arab Emirates
Number five on the list is the United Arab Emirates (UAE). Located on the Arabian peninsula, the UAE is approximately the size of South Carolina. In 2018, the UAE exported 5.2% of the world's total oil exports, accounting for $58.4 billion.

At $1.113 trillion, global crude oil shipments in 2018 were up 34% versus the previous year, according to the latest statistics; however, that number still represents a decline of more than 19% from 2014 levels.
6. Kuwait
Given its small size, it is impressive that Kuwait is number six on the list of the world's top oil exporters. The country, established in 1752 and located in the Arabian peninsula, is about the size of Connecticut. In 2018, the country exported $51.7 billion worth of oil, or 4.6% of the world's total.

7. Iran
Iran is the second-largest country by land area in the Middle East, and about twice the size of Texas. It is seventh on the list in 2018, exporting $50.8 billion worth of oil for a share of 4.5% of the global total.

8. United States
Located in the Northern Hemisphere and bordered by Mexico and Canada, the United States is the third-largest nation in the world. It is also the eighth-biggest exporter on the list. The U.S. exported $48.3 billion of the world's total oil in 2018 for a share of 4.3% of the worldwide total. The country has posted an increase of close to 300% in its international sales of crude oil since 2014, according to recent statistics.

9. Nigeria
The Federal Republic of Nigeria, located on the western bend of the African continent is the world's ninth-largest exporter of oil. The republic was declared in 1960 and has since become a nation with a $375.8 billion gross domestic product (GDP). Nigeria exported 3.8% of the world's total in 2018 with a value of $43.6 billion. Based on land size, the country is comparable to Texas.

As of 2024, the currently No. 8 ranked United States is expected to claim the No. 2 spot among oil exporters by country, according to forecasts from the International Energy Agency.

10. Kazakhstan
The Republic of Kazakhstan in northern central Asia is the 10th-largest exporter of oil in the world. The nation was formed in December 1991 after gaining independence from the Soviet Union. Based on land size, it is about twice the size of Alaska. In 2018, the country was responsible for 3.3% of the world's oil exports, worth about $37.8 billion.

I'm having troubles seeing where USA will revert to 1970's need of OPEC oil.... can anyone give some useful info to point this out. thank you.

We import crude oil from Canada to refine it and send it back, Canada can only refine 2M barrels of oil per day and they consume 2.5M per day. This is the main purpose of the pipelines, current and future.

Canada 49% of imported oil, consume 2.5m / day and produces 4.5m per day
USA imports apx 2.5m per day, exports back 500,000 refined per day.

if our import 50% is 2.5M per day the other 50% imported must equal 2.5M per day, not even 10% of what the middle east produces daily.

I'm having troubles seeing where USA will revert to 1970's need of OPEC oil.... can anyone give some useful info to point this out. thank you.
Originally Posted by bf0082

The useful info can be found in the history of OPEC using oil as a political weapon.

Why is Joe Biden agreeing with Trump that we must bring pharmaceutical manufacturing back to the US if China can supply us more cheaply? I think you'll find your answer when you give that some serious thought.

Why not just continue to rely on China for rare earth minerals? Why spend all that money to ensure we have the supply we need, when we need it.

There seems to be as close to a consensus as we are likely to see that past short term economic thinking can come back to bite us in the ass.

You can run the numbers six ways to Sunday showing how it would be cheaper to depend on other countries for what we absolutely need and can not do without, it doesn't mean it is the smart thing to do and thankfully, leaders on both sides of the aisle have hopefully seen the light.


Just because someone thinks they understand the numbers does not show they have a grasp of geo-political thinking. That's my opinion.

Never mentioned one thing to do with pharmaceuticals from China, how this pertains to oil is baffling and has no correlation at all.

Pharmaceuticals are over priced with a huge mark up as is, there are no cost controls with this item, in no way does oil and pharmaceuticals have anything in common with each other.

It's almost as ignorant as saying the apple iphone would be more expensive if made in the USA. in a retail sense...

(not the actual cost of making an iphone $200) mark up 500%

using OPEC in regards to current markets is out dated Reaganomics, I can't stress this enough, the USA IS AN OIL EXPORTER !!!!!... please understand what this means

We buy foriegn oil as a convenience, not necessity. can the same be said of pharmaceuticals, imo yes. since the mark up supports the actual price increases to manufacture and secure the ingredients from local or friendly sources.

But why hasn't it happened yet, well... there are companies that are currently seeing %1000 mark up and profits and a business doesn't care if Americans die, only in profits. Our Corporate overlords will not do this willingly even if its possible. Does this make any sense, is it possible to seperate this from future oil OPEC analogies. Is there any more info you need to have a better understanding of how and why businesses exist and why government regulations maybe helpful in some regards.

But global demand is such that producers with much higher marginal extraction costs are also needed to keep the world economy going. Originally Posted by lustylad

only thing that you say here that makes any sense is, saudia arabia cant produce enough oil to meet world demand, which is correct. OPEC sets a limit on how many MB/D they will sell each day and use the demand curve as a guide. when they are wrong they either increase or decrease production. Their member collectively can produce enough oil to satisfy the worlds market.

If they pump and sell to the whole world, any other exporters oil will create an excess and cause the contract price of OPEC to fall, which will cause OPEC to adjust their output.

OPEC likes $40 a barrel, most of their output uses this as the price point. The USA can produce oil at this level profitably, just not fracking oil, so they don't frack.... pretty simple... if OPEC reduces production the price of oil goes up, the increased demand can be met with fracking because they are making profits with higher prices.

To say the USA will Frack at a loss, to meet world demand is ignorant and false.

No country will sell oil at a loss to meet world demand. (maybe saudi arabia or russia to prove a point, but it can't sustain itself longterm.)

OPEC likes $40 a barrel, most of their output uses this as the price point. Originally Posted by bf0082

The graphs in this might help you understand,

https://www.oilandgas360.com/oil-pro...grams-running/

The Saudis needed an estimated $83.60 per barrel to balance their budget. Iran needed a whopping $194.60 per barrel. OPEC's not at all happy with $40 a barrel.

And look at the "Global Cost to Produce a Barrel of Oil." I don't trust the numbers on this graph, but maybe it gets the point across. In 2016, they estimate 21% of of world production needed $55 or more to break even. From the text and one of their sources, this should represent cash costs only, the cost to produce the oil. That is, it doesn't include the cost of drilling and completing wells, surface facilities, offshore platforms, etc., which often exceed the production costs.

If the price of oil stays at $40 a barrel, the companies with costs in excess of $40 are going to have to find a way to lower their costs, by shutting in production or otherwise, or go bankrupt. They're certainly not going to drill new wells. Production goes down because new wells aren't being drilled, and, less importantly, high-cost oil goes off line. At some point, if demand exceeds supply, then prices will go back up again.

If you've got oilfields, and your cost to find, develop and produce the oil is $20 a barrel, and the price is $60 a barrel, why would you sell at $40 a barrel? If you're Saudi Arabia, would you prefer to increase capacity hugely, and sell oil at $25 a barrel so you can make a $5 a barrel profit on your $20 per barrel cost? Or be part of a cartel and through production quotas get the price up to $60 a barrel, so you make a $40 per barrel profit? Well, you'd prefer to get the $40 -- that's 8X more than $5. And you've still got the oil in the ground that you would have produced if you'd decided to flood the market.

What has been proven so far IMHO... is that with all the different variables...the price of oil is not as easy to predict as some here think.


Think of it as guessing which % of the wind blowing in your face came from where?


Blaming Carter for oil prices is akin to blaming Trump for the pandemic.

So no more insulting talk about my man Jimmy Carter. Best President ever...except for Bush Senior.

...with all the different variables...the price of oil is not as easy to predict as some here think.

Blaming Carter for oil prices is akin to blaming Trump for the pandemic.

So no more insulting talk about my man Jimmy Carter. Best President ever... Originally Posted by WTF

Yes, the price of oil IS hard to predict. Brilliant observation!

But when you have a feckless, incompetent dildohead in the White House pressuring the Shah of Iran to abdicate the Peacock Throne and hand over power to a band of fanatical mullahs, instantly depriving world oil markets of over 4 million bpd of supply, I'll go out on a limb and say it's a reasonably safe bet that oil prices will soar and gas shortages will develop!!