U.S.-Led Wave of Crude price plunge to cripple Russia

[Goldbug]

[Goldbug]

[Goldbug]

[Goldbug]

[Mustank]

http://www.ibtimes.co.in/rumours-claim-russian-president-vladimir-putin-has-been-neutralised-by-coup-626276

If true, end of cheap oil?

http://m.bbc.com/news/world-europe-31897304

[Duckduck]

http://www.ibtimes.co.in/rumours-claim-russian-president-vladimir-putin-has-been-neutralised-by-coup-626276

If true, end of cheap oil?

http://m.bbc.com/news/world-europe-31897304

 

lol WTI almost made a new low recently.. coup or not oil prices arent going up...

[Piyopico]

Why should oil drop if Putin drops dead as long as US and Saudi continue flooding the market.......

[Kusje]

I don't understand why people keep claiming Saudi is flooding the market.

 

From all accounts, OPEC has kept production stable (at around 30m bbl/day) for a very long time. The "excess" in production is mainly from US shale oil which is more expensive to extract than OPEC oil.

 

Why does everyone blame SA instead of US?

[Wt_know]

because OPEC (Saudi the big bro) want to mantain oil at usd$80 per barrel

there is no free market ... everyone want to maintain a jin ho jiak price

luckily there is shale oil producer in usa that bring down the OPEC oil price

if not ... no usd$80 no talk

 

now Saudi want to throw oil price to kill the shale oil producer unable to make profit

then they will play with their daily production to maintain usd$80 per barrel

 

i hope the usa shale oil producer continue to shove some shit back to OPEC so that oil price can remain low

 

I don't understand why people keep claiming Saudi is flooding the market.

 

From all accounts, OPEC has kept production stable (at around 30m bbl/day) for a very long time. The "excess" in production is mainly from US shale oil which is more expensive to extract than OPEC oil.

 

Why does everyone blame SA instead of US?

 

Edited March 16, 2015 by Wt_know

[Mustank]

because OPEC (Saudi the big bro) want to mantain oil at usd$80 per barrel

there is no free market ... everyone want to maintain a jin ho jiak price

luckily there is shale oil producer in usa that bring down the OPEC oil price

if not ... no usd$80 no talk

 

now Saudi want to throw oil price to kill the shale oil producer unable to make profit

then they will play with their daily production to maintain usd$80 per barrel

 

i hope the usa shale oil producer continue to shove some shit back to OPEC so that oil price can remain low

 

 

 

i hope someone discover how we can store electricity efficiency

then everybody will jiak sai

[Jamesc]

I don't understand why people keep claiming Saudi is flooding the market.

 

From all accounts, OPEC has kept production stable (at around 30m bbl/day) for a very long time. The "excess" in production is mainly from US shale oil which is more expensive to extract than OPEC oil.

 

Why does everyone blame SA instead of US?

 

I like cheap oil.

 

I don't blame US,

 

I praise them.

 

[Jamesc]

 

i hope someone discover how we can store electricity efficiency

then everybody will jiak sai

 

Storing isn't a problem.

 

Its making electricity that is so expensive.

 

If they can make a lot of electricity cheaply

 

people will use up most of it even before

 

needing to store it. Especially me.

 

[Atonchia]

 

i hope someone discover how we can store electricity efficiency

then everybody will jiak sai

 

Now watching NGC - Aftermath

"World Without Oil"

 

whole world crippled within a few weeks, then alternative fuel source were made made from bio-fuel, making less food crops, millions die of hunger, millions die of wintry cold, millions more die due to diseases spread from the millions dead.......hospital hygiene level dropped because gloves no longer available because no more crude oil to produce them....

However, earth became cleaner, animals population boomed....after 40 years without oil, those that survived farmed, all food industry disappeared, only subsistence farming.

Algae became the main source for bio-fuel power grid came back-up.

 

I wonder will we see it in our life-time.

[Goldbug]

 

lol WTI almost made a new low recently.. coup or not oil prices arent going up...

For the USD to continue to appreciate, oil price will be kept low

[Ktglfc]

Current oil price is low, but not sure whether it will be lower or not...

 

Demand will always be there, esp from China who is storing oil at this level for sustainablility...

[Enye]

 

Now watching NGC - Aftermath

"World Without Oil"

 

whole world crippled within a few weeks, then alternative fuel source were made made from bio-fuel, making less food crops, millions die of hunger, millions die of wintry cold, millions more die due to diseases spread from the millions dead.......hospital hygiene level dropped because gloves no longer available because no more crude oil to produce them....

However, earth became cleaner, animals population boomed....after 40 years without oil, those that survived farmed, all food industry disappeared, only subsistence farming.

Algae became the main source for bio-fuel power grid came back-up.

 

I wonder will we see it in our life-time.

We are now facing oil glut and depressed oil prices

 

And you go and watch world without oil

 

Taking the contrarian thingy a bit too far?

 

😄

[Chucky2007]

We are now facing oil glut and depressed oil prices

 

And you go and watch world without oil

 

Taking the contrarian thingy a bit too far?

 

😄

selective reading..

[Goldbug]

From Scarcity to Plenty:
The Geopolitics of a World Awash in Oil

By Barry Desker

Synopsis

More sources of supply mean energy prices are likely to stabilise at lower prices than in the last decade. The decline in US dependence on Middle Eastern oil is likely to make the US see instability in the MENA region increasingly as a European problem.

Commentary

A decade ago, there were fears that the United States would be increasingly dependent on an unstable Middle East and a hostile Venezuela for oil imports. There were worries that US natural gas prices would be determined by the price of imported LNG. Today, there is growing attention to the prospects of the United States as a LNG exporter influencing prices in Asia and Europe. The shift occurred because of the unexpected emergence of unconventional oil and gas production in North America, especially as Saudi Arabia did not reduce its oil production to stabilise prices at relatively high levels.

This development, together with renewed supply from Iraq and Libya which had previously declined because of domestic political instability as well as reduced demand arising from the economic slowdown in China and the recession in Europe and the US following the global financial crisis of 2008, resulted in a sharp fall in the oil price. Earlier projections of continued increases in demand were based on continued healthy economic growth and tighter supply. The assumption was that a lack of new sources of production would lead to rising prices for oil and natural gas and a growing emphasis on energy security as consumers tried to lock-in supplies even as alternative sources of energy were promoted. It is now recognised that the majority of these alternative sources are not commercially viable unless subsidies are provided.

Impact on global markets and power balance

For oil and natural gas importers like Singapore, the cost of domestic utilities and transportation will be reduced while lower fuel costs for the important maritime and air services sectors will have a positive impact on their financial performance. Shipyards building offshore platforms and offshore supply vessels will have a dwindling order book. The building of LNG terminals in Singapore will enable Singapore to benefit from price differentials in the Asian, European and North American gas markets. When the first LNG terminal began operations in 2013, Singapore was no longer dependent only on piped natural gas from Indonesia and Malaysia.

Two major uncertainties affect global markets. First, whether the three natural gas regional markets will merge into a single market. Currently, the natural gas price is US$2.7 per million British Thermal Units (MMBTU) in North America, $7.4per MMBTU in Europe and $7.8 per MMBTU for re-gasified LNG sold in Northeast Asia. Secondly, whether the price differential between oil and gas continues in international markets. From a thermal energy value perspective, one barrel of oil is approximately equivalent to 6 MMBTU. With oil currently at around $65 per barrel, the oil equivalent price of gas should be approximately $11 per MMBTU. However, in all the major markets, gas is trading at a discount to its oil equivalent price.

The effect of the downturn in oil prices is that the power balance has shifted from the holders of resources to consumers. It will be a period of belt tightening for oil producers, although most of them have accumulated significant dollar reserves. This explains the rise in opposition to the Maduro administration in Venezuela which cannot dispense the largesse offered under previous president Hugo Chavez. It has made Iran more ready to talk to the West to remove the effect of crippling sanctions resulting from its development of indigenous nuclear technology, including enrichment, and limited Saudi Arabia’s capacity to buy off domestic opposition through larger social welfare hand-outs.

United action by OPEC to increase oil prices by restricting supply is unlikely. Saudi Arabia has a greater motive in maintaining the current price to squeeze Iran, its political rival in the Middle East, as the Saudis are concerned about the ongoing turmoil in the region and the risk of unfriendly political realignments in neighbours such as Yemen. Nearer to Singapore, Malaysia faces increasing pressure to meet the income shortfall through cutting oil and gas subsidies as a budget deficit looms. Declining oil prices offer Indonesia an opportunity to cut back on oil subsidies now that it is a net oil importer. Importers like South Korea and Japan will also benefit from lower oil prices.

Changes in trade patterns and perspectives

Significant changes in trade patterns are likely. Russia will export more to China and East Asia, with Europe now more wary of increasing dependence on Russian oil and gas after the turmoil in Ukraine. Global markets will be affected by the declining US reliance on imported oil and the expectation that the US Congress will adopt legislation allowing an export of the American surplus. If this occurs, the US oil and gas markets will become increasingly integrated and the global integration of gas markets is likely to occur. However, it is uncertain whether the US will allow oil and gas exports.

The decline in US dependence on Middle Eastern oil is likely to make the United States see instability in the Middle East and North Africa increasingly as a European problem. After the long and inconclusive wars in Afghanistan and Iraq, there will be a reluctance to expend American manpower and resources on the rising threat of the Islamic State and unstable regimes in the Middle East. While policy rhetoric about a re-balancing to Asia will be heard, US defence budgets cuts will occur and there is unlikely to be a significant increase in US military deployments in Asia. Although there will be wariness about rising Chinese economic and military capabilities, the United States will remain the paramount global military power in the decade ahead.

While attention has been focused on the shale gas revolution in the United States, future potential unconventional oil and gas producers include Argentina, China and Ukraine. Governments of these energy importers will want to exploit their resources but will be constrained by their infrastructure, water access and industry expertise. A key difference is that in the United States, underground resources are owned by the owners of the surface land. Elsewhere, the state owns these resources, giving individual land owners no incentive to exploit the reserves. They are likely to emerge as opponents of hydraulic fracking because of the perceived risks of stimulating earthquakes, the negative impact of methane leakage and concern with water management issues.

Nevertheless, the critical point is that the presence of increasing sources of supply is likely to result in energy prices stabilising at lower levels for the next decade compared to the last ten years, provided there is no major political upheaval which disrupts energy markets.


Barry Desker is Distinguished Fellow and Bakrie Professor of Southeast Asia Policy, S. Rajaratnam School of International Studies, Nanyang Technological University).This article was first published in the Straits Times.