"If we get to a point where we feel frustrated by a deliberate action of shale producers to just sabotage the market, OPEC will sit down again and look at what process it is we need to do," said Nigerian Oil Minister Emmanuel Kachikwu.By the way, for those who have forgotten (I had), Mark Papa is CEO of Permian oil producer Centennial Resource Development Inc:
Some OPEC members seem keen to show they have shed any prior naivete about shale, making it a key topic during Thursday's meeting after barely mentioning it before. Shale's limitations, including rising service costs, also were discussed.
"We had a discussion on (shale) and how much that has an impact," said Ecuador Oil Minister Carlos Pérez. "But we have no control over what the U.S. does and it's up to them to decide to continue or not."
Mark Papa, chief executive of Permian oil producer Centennial Resource Development Inc, was asked by OPEC delegates to give a presentation on shale's potential last week. He appeared to have played his cards close to his chest.
"In terms of the threat, we still don't know how much (U.S. shale) will be producing in the near future," Nelson Martinez, Venezuela's oil minister said after the talk.
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US Shale Killing OPEC
From an Investor's Business Daily op-ed:
Despite cuts in oil output and threats of even more, the OPEC cartel can only watch in disappointment as prices for crude defy their efforts to raise them. Credit fracking for the cartel's loss of power over the world market.
These are desperate times for OPEC. On Thursday, oil prices plunged nearly 5% when it became apparent OPEC wouldn't cut output further, which would have put a serious dent in members' finances. Instead, the cartel will extend current cuts for nine more months.
In essence, they're declaring victory and going home.
Just three and a half years ago, the price for a barrel of West Texas Intermediate crude peaked at $110.62 a barrel. At the time, President Obama was pushing Americans to conserve and warning, "we can't drill our way out of the problem."
Turns out, we could. Today, oil prices are struggling to rise above $50 a barrel, thanks in large part to vast new supplies of crude on the market from American frackers. They've used technology to dramatically slash costs, so OPEC can no longer control the global market price.
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Will They Or Won't They -- Only Putin Knows For Sure
From The New York Times:
Global oil prices were in a deep slump. And because oil profits lubricate the Russian economy, the Kremlin was casting about for a solution. So Russia’s leaders set politics aside and cut a deal with Saudi Arabia: Russia agreed to join the Organization of the Petroleum Exporting Countries on a production cut, with the intent of lifting global oil prices.
On the face of things, the agreement worked: Prices picked up, and along with them the cost of gasoline and consumer goods in developed countries.
There was just one catch: Russia, in fact, did nothing.
“There was a beautiful public relations effect,” said Aleksey I. Turbin, at the time a senior official at the Ministry of Energy who helped negotiate the deal with the Saudis.
That was 16 years ago, but once again, an oil-dependent Kremlin is, if not exactly desperate, at least eager to prop up prices, and again questions abound on whether it is serious about cutting output or just assembling another public relations effort.
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Closing The Poll
I guess I forgot about this poll. Whatever. The poll: good, bad, or indifferent, your thoughts on "special counsel" to investigate the "Russian thing":
- good: 30%
- bad: 34%
- indifferent: 36%
