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OPEC: 'All Eyes Are on How Quickly US Production Falls'


#1

OPEC: 'All Eyes Are on How Quickly US Production Falls'

Andy Rowell

The oil cartel, OPEC, has confirmed what has been obvious to many for months: US shale production is in deep, deep trouble as the fracking boom bursts in the face of low oil prices.

The cartel published its latest monthly oil market report yesterday revealing that it believes it is winning the price war it started with the US shale industry.

The report is seen as a must-read for people within the oil industry.


#2

The Stock Market cognoscenti also state that Fracking is tied to many billions of hedge fund investment money. So when it doesn't produce profits, the hedge funds feel the heat. Commodities' prices have been decimated all around the world and a big part of the reason is that China's recession (including its currency devaluations and over-zealous building campaigns) has called for far less production. Thus suppliers have no one TO supply.

Any cessation or slowing down of the engines of industry (and preferably, those of war) can only be good for Earth Mother.

The financial reverberations are yet to fully implode and thanks to our sold-out lawmakers, precedent is already on the books for Wall Street and its casino capitalists to cut the creamy profits off the top and leave the toxic detritus to taxpayers.


#3

The author says that for now that Opec is winning the oil wars.
Opec has dropped prices ostensibly to compete with the threat posed by shale oil and fracking. Thus they kept prices low to ruin the competition which needs a higher barrel price to offset costs of production.

Sounds true and no doubt is true to some extent but it is NOT the only truth.

The author is leaving oil stained footprints behind him! No mention is made of the extraordinary rise of alternative energy production in the last few years. They literally have a backlog on solar panels because the demand is so high that the manufacturers can't keep up with the demand. Same thing for wind turbines. All over the world alternatives have taken a big chunk out of the market for oil but it isn't the actual amount involved which by comparison is small (although Big Coal took a hit as solar furnace energy plants and wind farms supplant coal plants construction).

It is the projected amount of oil that will not be used that Big Oil and Gas are worried about. Opec sees a grim future where the world turns away from fossil fuel use and in response to a very powerful surge in alternative energy use, Opec dropped prices to hurt that industry as much and maybe more than it did fracking. Shale was always a bad choice as it was super polluting and expensive plus it was actually slow. Fracking was much faster.

So Opec dropped prices and hurt the Oil Shale industry, it hurt the fracking boom but the author never mentioned the other target. The inexorably advancing competitor that Big Oil fears most of all... the phenomenal rise of solar and wind.

Only a few years ago Big Oil felt safe because alternatives weren't yet economically competitive but in the last few years they have become competitive and in many cases (wind power) they are cheaper to use than fossil fuel energy production.

Let's just say that there is a change in the wind and a bright sunny day is in our future and OPEC went to war.

Someone should tell this author... about that other 'oil' war ... the one that OPEC isn't winning.


#4

The author writes for Oil Change International. They are an advocacy group detailing the benefits of clean energy and how the world must wean itself off fossil fuels entirely. They point out the true costs of fossil fuels on the environment which is in the many billions of dollars and than all of the added costs such as subsidies and the rise of Militarism so as to protect sources of fossil fuels.

If you go to the website linked to in the byline you will see all of this stuff detailed, He is fully aware of how the Oil lobby tries to derail clean energy


#5

Useful site ...thanks.

Why didn't the author make the link to the rapid drop in the cost of solar and in particular in wind power? It is not something that is mentioned anywhere in the MSM and apparently not elsewhere either. Nevertheless the rapid growth of alternatives in the first half of this decade alone is significant and unlikely to not attract the attention of Big Oil. New developments are coming online which are sweeping through the public's mind - everything from spray on flexible solar paint to wearable solar cloth. The advent of Big Alternatives as opposed to Big Oil is upon us and most certainly is being addressed by OPEC as well as the fossil fuel companies.

The site is useful for data about oil but needs more data about alternatives imo. Still for an info wonk like me it will be useful.


#6

“On the face of it, the Saudi-led OPEC strategy to defend market
share regardless of price appears to be having the intended effect of
driving out costly, ‘inefficient’ production.”

The IEA outlined how “US oil production is likely to bear the brunt of an oil price decline that has already wiped half the value off”

Well yee god damn haw!!!!!

The House of Saud done Saud that thar production in half!


#7

I'd like to take something from this that feels good, but I just can't. The shale/fracking industry is back on its heels at the moment, but they can wait, they know these prices won't hold. And when oil prices quickly spike the world "economy" will go nuts. That is, all the crackheads on Wall St and the other financial gambling markets will speculate everything into the realm of the nonsensical. Some of the 1% will get huge windfalls, but the 99% will once again go through gut-wrenching agony for the sake of a dying industry. Except for the global conflict that will ensue, the sooner we run out of oil altogether, the better.


#8

OPEC did NOT "drop prices" - what OPEC did was maintain it's production amounts while the US glutted the market - THAT was what caused the price to drop ...

Hey, if this runs the fracking/shale/TS folks out of business - well, every cloud has a silver lining ...