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Showing posts with label OPEC. Show all posts
Showing posts with label OPEC. Show all posts

Monday, March 5, 2018

America Soon To Be World No.1 Oil Exporter!

Did Trump Just Make American Oil Great Again?

  • Source: TTN
  •  
  • by: TTN
18 8 1  38

Did Trump Just Make American Oil Great Again?
America has been in the grip of the OPEC cartel for far too long. Now, according to the Wall Street Journal, America will become the world's leading oil exporter in the next five years.
 
"The U.S. will overtake Russia to become the world’s largest oil producer by 2023, accounting for most of the global growth in petroleum supplies...U.S. crude production is expected to reach a record of 12.1 million barrels a day in 2023, up about 2 million barrels a day from this year, said the International Energy Agency, which advises governments and corporations on industry trends. American oil output will surge past Russia, currently the world’s largest crude producer at about 11 million barrels a day.
 
'The No. 1 overall message, non-OPEC supply growth is very, very strong, which could change the parameters for the oil markets in the years to come, led by the United States, but also Brazil, Canada and Norway,' IEA Executive Director Fatih Birol said Monday during the CERAWeek by IHS Markit energy conference in Houston.
...
 
Of the 6.4 million new barrels of oil that will be pumped every day between now and 2023, almost 60% will come from the U.S., the IEA said. 'And I can tell you our expectations may well need to be revised upwards if prices are higher,' Mr. Birol said." 
 
The fracking revolution happened under Barack Obama, in spite of regulatory efforts to stop it; with the regulatory rollback that has taken place under President Trump, now America can compete and succeed rather than remaining beholden to the Middle East.   

Read more at http://trumptrainnews.com/articles/did-trump-just-make-american-oil-great-again#vFOwl4Er2sHKXAfs.99

Thursday, February 9, 2017

Liberals--Do You Want The Oil From Canada Or Saudi Arabia? Maybe You Should Reconsider Your Opposition?


Blood and oil, the disturbing truth about Saudi Arabia


The Keystone XL Pipeline was awakened from the dead with the stroke of President Donald Trump’s pen.
The new pipeline, proposed in 2008 by the Canadian oil company TransCanada, was planned to cover a distance of 1,200 miles stretching from Hardisty, Alberta, to the Gulf of Mexico. It is expected pump 830,000 barrels of oil per day through the United States.
America is currently importing 3 million barrels per day. Keystone could reduce America’s dependence on Saudi Arabia, which is currently exporting 1 million barrels per day to the U.S.
The State Department gave the project the go ahead. Even though petroleum prices are selling for half of their 2008 levels, there is optimism in the oil patch that Western Canada’s main economic engine will pull it out of recession. It will be a win-win situation. A stronger Canadian economy means more Canadian tourist dollars being spent in the United States and Canadians purchasing more goods made in America.
It also reduces America’s dependence on Middle Eastern OPEC petroleum which has been at times fickle, having imposed an oil embargo on the United States in 1973 which was followed in 1979 by the Arab oil crisis.
The Greens protested the pipeline saying it would stall research into renewable energy and threaten the environment. Climate-change advocates believe that the mining and processing of bitumen, the sands that contain the oil, spews off carbon dioxide which in turn melts the polar ice caps. For many Greens, anything is better than gasoline derived from Alberta’s oil sands, even oil beneath the sands of Saudi Arabia.
In its liquid form, crude from Texas to Timbuktu leaves the same amount of carbon footprint. It is the combustion of gasoline in automobiles that creates far more carbon dioxide than the drilling or mining of oil.
But there is an important reason why America should wean itself of Saudi oil: the governing monarchy of Saudi Arabia.
Neither liberals nor the federal government want to consider life in Saudi Arabia; that their citizens live in a place more attuned to the Dark Ages than the New Millennium. The very people that stand up for those that cannot demand equal rights are gleefully driving around with Saudi oil sloshing in the gas tanks of their Volvos and Saabs.
This is transportation courtesy of a society based on the 7th Century dictates of Muhammad, where women are charged if they are raped and gays are executed. Some “criminals” are beheaded in the town square, their bodies crucified and put on display.
The Saudi News Agency is expected to announce the beheading and crucifixion of Ali Mohammed al-Nimr. In 2011, at age 14, his friends got the boy to attend an anti-government protest. Over the next three years he was tortured. Torture wasn’t necessary for a confession because he was arrested at the protest. Then there was the mass killing of 46 prisoners in 2016, the largest mass execution in Saudi Arabia since 1980. In 2015 Saudi Arabia executed more than 150 people.
There are 16 reasons the Saudi government can execute someone.
They are: aggravated murder, non-premeditated murder, non-fatal terrorism activity, rape (to the man, just jail for the victim), espionage and treason.
You can also be executed adultery, consensual gay sex with an adult, arson, robbery, burglary, drug distribution, drug possession, apostasy, consummation of intoxicants, sorcery and witchcraft.
Dying over a glass of beer is outrageous, but that is life in Saudi Arabia. I recently did a phone interview with one of my closest friends of more than a decade, a lady who is married to my best friend. They both worked in a Western compound in Jeddah, the second largest city in Saudi Arabia and located on the west coast.
I adhere to something I coined: better to be too paranoid than not paranoid enough. Therefore I have changed my friends’ first names.
I know generally about Saudi Arabia from the trips my publisher took there and from my own research, but Alice told me about day-to-day living outside their Western compound.
Myers: Alice, you and Ted worked in Saudi Arabia for two years. Compound life sounds pretty much like living anywhere in North America except for the climate. What struck you most when you went outside of the compound and into the city?
Alice: What bothered me right away was the Mutawa. They are actually horrible people. They are selected to be the “religious police” and uphold Islamic values throughout the community. Ironically, during our last week in Saudi I had an encounter with one. They wear traditional Saudi Dress, white robe with the red/white headdress. I was in the shopping mall with my Egyptian friend, we were wearing our abaya and I had the baby with me. The Mutawa aggressively approached us, got in our face shouting at us in English, “This is Saudi Arabia, cover your hair!” Then they walked away. We immediately covered our hair. I kept mine covered until I safely got into the car with the driver, but my friend removed hers by the time she got to the next store.
Myers: I would be afraid that even a little bit of indignation might get me into real trouble. It doesn’t take much to be in harm’s way, does it?
Alice: There are horrible rumors about them such as if they see a young female on her own, they will stop her and if she doesn’t have any papers, iqama (like a residence permit), they will drive her out to the desert, rape her and then dump her somewhere. There was also a news story about a prince who raped and killed a Filipino maid, then dumped her body out of his fancy SUV (there was a picture of this body being dumped from the car) — obviously nothing happened there.
Myers: Obviously the Saudi’s have very strict rules about women’s hair. What are some of the other rules that seemed bizarre?
Alice: Women are not allowed to drive, women must be covered wearing an abaya (foreign women don’t usually have to cover their hair, but you should always carry a scarf with you in case you get asked). Women and men are not to be alone talking, especially if they are unmarried. Girls who have had their periods have to wear an abaya. Men are not allowed to speak with married women (so in fact that Mutawa shouldn’t have been speaking to us — the irony). If Ted was there he would have told me to cover my hair. But it boils down to this, when wearing an abaya you are not supposed to have any skin showing — wrists, ankles, etc.
Myers: Are dress rules as strict for men?
Alice: Men are allowed to wear t-shirts, but they are supposed to wear trousers. However, lots of men (foreigners) wore shorts, Ted included. Once in the shopping mall Ted was told by some old man that he should be wearing trousers and that it is haram (forbidden).
Myers: What about other things that Americans, and most of the world, consider normal? What are the restrictions on that?
Alice: You cannot drink alcohol, but there are lots of people who brew their own beer and smuggle in ingredients via pet food bags and other means. Ted went to a beer-tasting party at one of the compounds. We went to a party a couple of times at the U.S. Embassy. Now again the irony, when leaving the U.S. Embassy everyone is staggering across the busy street (it is clear people have been drinking) and the local police were there to help people cross the street!
Myers: This sounds like a society you would find in Bizarro World. I think Personal Liberty® readers are going to be intrigued.
Alice: There is a rumor that a plane belonging to a member of the royal family was searched by accident and inside they found an insane amount of booze.
Myers: That really isn’t surprising. The House of Saud makes rules for the commoners which they can’t possibly be expected to follow. It was leaked in September 2015 that a senior member of Saudi Arabia’s royal family had circulated a letter expressing his fear that the monarchy could collapse upon itself unless the king is urgently replaced and the position of deputy crown prince scrapped.
In 2010, a prince made international headlines when he was caught on tape viciously beating his servant — and male lover — to death at a five-star hotel in London. He was sentenced to 20 years but faces the death penalty when he gets back home. But I regress. Tell me more about what it was like for you living in Saudi Arabia.
Alice: Another rule is that you are not allowed to eat pork. They don’t sell it anywhere in Saudi. However, if you go to a foreign store in Dubai, like Tesco, they have a foreigner section where you can buy pork-based products like sausages, etc. But they really crack down on women.
Myers: That and protesting the government. It is ironic to me that Muslim women were thick as thieves in that 500,000 women march protesting Donald Trump. If they tried that in Riyadh it would be known as the 500,000 casket parade. But progressives don’t seem to worry very much that women, gays and even children caught up in a protest march could have their heads lopped off. Liberals pull up in their cars and tell the attendant to fill it with premium. Doesn’t seem to occur to them that one out of every 10 gallons they buy supports Saudi Arabia.
Alice: Most people can’t imagine what Saudi Arabia is like unless they have lived there. Even on the compound we lived, when I was at work I couldn’t have my shoulders exposed and I had to wear a skirt/dress to my knees. I became very conscious of this, and even when I wasn’t working, I wouldn’t wear a tank top walking to the compound shop or to a work event.
Myers: Those two years must have been difficult years for you and Ted. I want to thank you for sharing your experiences with me and with the readers at Personal Liberty®.
After my interview with Alice, it came to me that what is reported in the mainstream news is either a lie or passes by us unnoticed. People who hear of real-life experiences will realize that there is a lot more to the oil industry than geology, economics or ecology. Millions of people live and die under the sword in Saudi Arabia, a country that the United States has financially and militarily supported without question since 1945.
It is a question of conscience. For me, I would rather burn dirty oil than bloody oil.
Yours in good times and bad,
— John Myers

Monday, August 1, 2016

This Is Great News For Americans. Will It Last?


Texas shale oil has fought Saudi Arabia to a standstill


Orion Drilling Co's Perseus rig in Webb County, Texas
Orion Drilling Co's Perseus rig in Webb County, Texas. Oil and gas production in the US state's Eagle Ford and Permian basins have transformed the global market CREDIT:BLOOMBERG


Opec's worst fears are coming true. Twenty months after Saudi Arabia took the fateful decision to flood world markets with oil, it has still failed to break the back of the US shale industry.
The Saudi-led Gulf states have certainly succeeded in killing off a string of global mega-projects in deep waters. Investment in upstream exploration from 2014 to 2020 will be $1.8 trillion less than previously assumed, according to consultants IHS. But this is a bitter victory at best.
North America's hydraulic frackers are cutting costs so fast that most can now produce at prices far below levels needed to fund the Saudi welfare state and its military machine, or to cover Opec budget deficits.

shale
US shale oil output has risen exponentially, and the latest dip is just a temporary setback CREDIT: EIA
Scott Sheffield, the outgoing chief of Pioneer Natural Resources, threw down the gauntlet last week - with some poetic licence - claiming that his pre-tax production costs in the Permian Basin of West Texas have fallen to $2.25 a barrel.
"Definitely we can compete with anything that Saudi Arabia has. We have the best rock," he said. Revolutionary improvements in drilling technology and data analytics that have changed the cost calculus faster than almost anybody thought possible. 
Opec may now have to brace for a longer war of attrition than they ever imagined. Global inventories of crude oil remain near all-time highs, record volumes are being stored on tankers off-shore
The 'decline rate' of production over the first four months of each well was 90pc a decade ago for US frackers. This dropped to 31pc in 2012. It is now 18pc. Drillers have learned how to extract more.
Mr Sheffield said the Permian is as bountiful as the giant Ghawar field in Saudi Arabia and can expand from 2m to 5m barrels a day even if the price of oil never rises above $55.
His company has cut production costs by 26pc over the last year alone. Pioneer is now so efficient that it is already adding five new rigs despite today's depressed prices in the low $40s. It is not alone. 
The Baker Hughes count of North America oil rigs has risen for seven out of the last eight weeks to 374, and this understates the effect. Multi-pad drilling means that three wells are now routinely drilled from the same rig, and sometimes six or more. Average well productivity has risen fivefold in the Permian since early 2012.

Workers at a Statoil USA site in the Eagle Ford formation, Texas
Workers at a Statoil USA site in the Eagle Ford formation prepare to tie in a pipeline extension CREDIT: DAVID GAFFEN/REUTERS
Consultants Wood Mackenzie estimated in a recent report  that full-cycle break-even costs have fallen to $37 at Wolfcamp and Bone Spring in the Permian, and to $35 in the  South Central Oklahoma Oil Province. The majority of US shale fields are now viable at $60.
This is a cold douche for Opec. It has been an article of faith among Gulf exporters that hedging contracts had kept US shale companies on life-support and that there would be a brutal cull as these expired in the first half of this year.
No such Gotterdamerung has occurred. A few over-leveraged players have gone bankrupt, but Blackstone, Carlyle and other private equity groups are waiting on the sidelines to buy distressed assets and take over the infrastructure.

Shale
The real growth area for shale oil is in West Texas CREDIT: EIA
The crucial mid-tier drillers have weathered the downturn. Many are still able to raise funds at low cost. Total output in the US has fallen by 1.2m barrels a day to 8.5m since the peak in April 2015 but production has been bottoming out. Today's frackers can just about cope with oil prices in the $40 to $50 range.  
Opec may now have to brace for a longer war of attrition than they ever imagined. Global inventories of crude oil remain near all-time highs, record volumes are being stored on tankers off-shore.
Forest fires in Canada, rebel attacks in Nigeria, and other global upsets took 4m barrels a day off the global market at one stage over the May-June period, masking the continued world glut. These disruptions are subsiding. Lost output has dropped to nearer 2m barrels a day. That is a key reason why US crude prices have fallen 20pc to $41 over the last six weeks.
Morgan Stanley says the long-awaited rebalancing of the global markets has been delayed for yet another year until mid-2017.
Worse yet for Opec, consultants Rystad Energy say that 90pc of the 3,900 drilled but uncompleted wells - so-called 'DUCs' - are profitable at $50. This implies an overhang of easy supply waiting to hit the market. Citigroup expects an extra 1m barrels a day in late 2016.

Shale
The rig count may have plunged in West Texas but output per rig has soared. Production is steady CREDIT: EIA
Once that is cleared, shale drillers will have to build new rigs. Mr Sheffield said Pioneer can do this is 135 days flat, a dramatic contrast to deep-water mega-projects that can take seven to 10 years.
This agility has changed the nature of the oil cycle. It means that Opec faces an unprecedented headwind from mid-cost producers. Stalwarts Anadarko and Hess say they will wait for $60 before investing heavily, but they are already preparing the ground.
The losers are high-cost projects elsewhere: off the coast of Nigeria and Angola, in the Arctic, or the oil sands of Canada and Venezuela's Orinoco basin.  Roughly 4m to 5m barrels a day of future supply has been shelved around the world.
This sets the stage for an oil shortage and a price spike later this decade. Whether Opec can survive that long is an open question. Most of the cartel need prices of $100 to fund their regimes.

Shale
Wellhead costs for US shale have plummeted as technology improves CREDIT: RYSTAD
Venezuela is already in the grip of hyperinflation and food riots. Nigeria's currency peg was smashed last month, and the naira has fallen 60pc. Angola has turned to the International Monetary Fund, Azerbaijan to the World Bank.
Saudi Arabia has deeper pockets but its net foreign reserves have fallen from $737bn to $562bn, even though it is borrowing money abroad to slow the loss. It burned through another $11bn last month.
Riyadh is trying to curb the country's culture of subsidy and entitlement, but was forced to sack a minister and backtrack after a 500pc rise in water prices set off an outcry. It is the famous social contract from cradle-to-grave that keeps the House of Saud in power.
What is fracking? Video guide to how hydraulic fracturing worksPlay!02:34
The IMF says the budget deficit will be 13pc of GDP this year, but nobody really knows since true military spending is secret and subsidies for Egypt and a nexus of clients in the Saudi sphere are opaque. Riyadh probably has a safe reserve buffer for another eighteen months at current oil prices before perceptions change and capital flight turns serious.
If West Texas really can boost output by another 3m barrels a day at anywhere near $55 a barrel - as Mr Sheffield claims - the Saudis may have to dig in for a very long and painful siege. 

Wednesday, January 7, 2015

Causes Of The Lower Gas Prices

Ex-Wells Fargo CEO Kovacevich: OPEC 'Wants to Punish Fracking' Through Price War

Wednesday, 07 Jan 2015 07:20 AM
By Dan Weil
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OPEC's refusal to cut oil production in response to crude prices' drop to 5 ½-year lows represents an attack against U.S. companies using hydraulic fracturing (fracking) to extract oil, says former Wells Fargo CEO Richard Kovacevich.

Fracking becomes unprofitable with oil priced around $60 to $70 a barrel, experts say. U.S. crude traded at $48.93 Tuesday morning.

"OPEC is playing this game to see how long it's going to last. They want to punish some of the fracking that's going on," Kovacevich told CNBC.

The world oil market has 1 million barrels a day of surplus capacity, and Saudi Arabia could easily reduce its output by that amount, he said. "I was playing golf with the CEO of a major oil company this past weekend, and he says 1 million barrels is not a lot to absorb."

In any case, Kovacevich noted that the oil price plunge constitutes a boon for U.S. consumers, and he thinks crude will rebound to $70 or $80 by mid-year in any case.

To be sure, Steve Forbes, chairman of Forbes Media, is none too impressed with OPEC.

"OPEC's impact on prices is grossly exaggerated," he wrote in Forbes. "Speculators believed OPEC would magically pull a rabbit out of the hat [at its November meeting]. But OPEC doesn't even have a hat, much less a rabbit."

The cartel barely accounts for more than one-third of global oil output, Forbes explained. Oil production has exploded to at least a 31-year high in the U.S.

"The biggest factor in the pummeling of petroleum prices . . . is the strengthening dollar," Forbes said.

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