Saudi Arabia and Market Share
Comment: the slump in the price of oil began in October, 2014, and accelerated in December, 2014, when OPEC announced no cut in production at their Thanksgiving week meeting. The 30-second Saudi soundbite: they made the decision unilaterally, and they were protecting their "market share."
"The world" interpreted this to mean a price war with shale producers in the US and oil sands in western Canada. Interestingly enough, the international press keeps talking about Libya, and back in 2013, OPEC did away with its quota-monitoring committee. I think Saudi has three issues:
Links:
"The world" interpreted this to mean a price war with shale producers in the US and oil sands in western Canada. Interestingly enough, the international press keeps talking about Libya, and back in 2013, OPEC did away with its quota-monitoring committee. I think Saudi has three issues:
- OPEC members cheating (that's their "real" market share at risk)
- terrorist nations (Libya, ISIS, Iran)
- North American energy revolution
Links:
- EIA: Oil imports into the US
- EIA: Oil imports into the US from Saudi Arabia
- Michael Fitzsimmons, SeekingAlpha, SaudiArabia: Do The Math, December 5, 2014
US crude oil imports from Saudi Arabia:
- recent historical 30-second sound bite: 1.5 million bopd
- August, 2014: 0.1 million bopd
- September, 2014: 1.0 million bopd
Back of the envelope calculations:
From the Fitzsimmons link, $138 million per day / 600,000 bopd = $230 / bbl.
Links and Updates
L'Arena, Il Mercenario, Ennio Morricone
Links and Updates
- Saudi Arabia to expand oil field to maintain production, April 24, 2016
- Saudi Arabia says "no"on production freeze at Doha, posted April 24, 2016
- Saudi pumps less oil, month-over-month -- December 10, 2015
- Random update, Saudi's oil imports into US -- January 3, 2015
- Saudi's $40 billion annual deficit; how it may meet its shortfall -- Rigzone, December 26, 2014
- It's all about market share -- flashback, The Prize
- Not a conspiracy, it was not political -- John Kemp -- Rigzone; it's all about market share -- Financial Times -- December 22, 2014
- Is the "glut" a myth? -- Richard Zeits, Seeking Alpha, December 21, 2014
- Why Saudi can afford to let oil price slide. -- December 11, 2014
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.