A HISTORIC change of roles is at the heart of the clamor and turmoil over the collapse of oil prices, which have plummeted by 50 percent since September. For decades, Saudi Arabia, backed by the Persian Gulf emirates, was described as the “swing producer.” With its immense production capacity, it could raise or lower its output to help the global market adjust to shortages or surpluses.
But on Nov. 27, at the OPEC meeting in Vienna, Saudi Arabia effectively resigned from that role and OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would “stabilize itself eventually.” OPEC’s decision was hardly unanimous. Venezuela and Iran, their economies in deep trouble, lobbied hard for production cutbacks, to no avail. Afterward, Iran accused Saudi Arabia of waging an “oil war” and being part of a “plot” against it.
By leaving oil prices to the market, Saudi Arabia and the emirates also passed the responsibility as de facto swing producer to a country that hardly expected it — the United States. This approach is expected to continue with the accession of the new Saudi king, Salman, following the death on Friday of King Abdullah. And it means that changes in American production will now, along with that of Persian Gulf producers, also have a major influence on global oil prices.
Much more at the article.America was once, by far, the world’s largest oil producer and exporter, and its swing producer. The Texas Railroad Commission determined “allowable” levels of production for Texas, the Saudi Arabia of the day. But by 1970, United States oil production had reached its high point of 9.6 million barrels per day and began to decline.
Spoiler alert: we're not going to see $100 oil again; and, the baton has been passed: the US is now, once again, the global "crude oil swing producer."
******************************
Love Story
From The Washington Post:
They met at an art show.
She was a painter displaying her abstract landscapes, a single mother of three daughters who’d grown up on a chicken farm in South Korea. He was a wealthy bachelor with more interest in politics than art who had stopped by the show in suburban Maryland on a whim.
His eyes didn’t gravitate to the paintings.
“I was more interested in the artist than the art,” he said.
He gave her his phone number, but she never called. Still, he didn’t give up. They eventually met again, fell in love and married several years later, in 2004.Spoiler alert: they are still in love.
No comments:
Post a Comment