We'll be off the net for awhile -- traveling. But we leave you with this:Today, just four days later, over at Bloomberg:
July 7, 2017: oil prices plunge 3% as signs of oversupplied market persist.Ah, yes, OPEC exports hit a 2017 high, "casting doubt over efforts by producers to curb oversupply."
The S&P 500 energy index sinks to its lowest level since April 2016, with U.S. crude oil now -2.9% to $44.20/bbl following EIA data that showed continued strength in U.S. oil production in the final week of June just as OPEC exports hit a 2017 high, casting doubt over efforts by producers to curb oversupply.
Sort of reminds me of this once said by a disbarred president: "Fool me once, shame on you; fool me twice, shame on me.
Headline: Saudi Arabia Exceeds Oil-Production Cap for First Time
- June crude output said to rise to 10.07 million barrels a day
- Kingdom, major producers agreed to curb global oil supply
Saudi Arabia told OPEC it pumped 10.07 million barrels a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.
The world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia.
Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public.Normally, an increase in production in the middle of the summer for Saudi Arabia would not be significant: Saudi needs huge amount of oil during the summer to run its citizens' air conditioners. But they agreed to a production cut, and they did not keep to the agreement they brokered.
But even more significant: if their only "sin" was to increase production, one might have overlooked it -- due to the "air conditioner issue" -- but in light of the fact that OPEC overall brought 2017 exports to a new record -- that's the real "sin."
By the way, about a year ago I know I wrote on the blog that I doubted we would ever see a Saudi Aramco IPO launch. I just know I wrote that. But I'll never find it. But I will spend the day looking for that post. LOL. Apparently there's a rumor out there (somewhat sketchy, I will admit) that the IPO may not happen. When I saw that, this is what I wrote in an e-mail (not ready for prime time):
With regard to the Arab IPO: I know I posted on the blog a year ago that I doubted we would ever see the IPO -- not because of price of oil, but because the KING would never go along with selling part of his kingdom AND the KING would never go along with the transparency required. I will now spend the rest of the day looking for that post. LOL. I'll never find it.
Perhaps this is a one-off, but one wonders. One swallow does not a spring make. The question is whether we will see another swallow next month. If so, watch out for the black swan.