• OPEC Unity Shattered as Saudi-Led Policy Leads to No Limits

    From Obamanomics@21:1/5 to All on Sat Dec 5 05:17:44 2015
    XPost: alt.politics.media, sac.politics, alt.politics.usa
    XPost: alt.politics.economics

    OPEC abandoned all pretense this week of acting as a cartel.
    It’s now every member for itself.

    At a chaotic meeting Friday in Vienna that was expected to last
    four hours but expanded to nearly seven, the Organization of
    Petroleum Exporting Countries tossed aside the idea of limiting
    production to control prices. Instead, it went all in for the
    one-year-old Saudi Arabia-led policy of pumping, pumping,
    pumping until rivals -- external, such as Russia and U.S. shale
    drillers, as well as internal -- are squeezed out of market

    “Lots of people said that OPEC was dead; OPEC itself just
    confirmed it,” Jamie Webster, a Washington-based oil analyst for
    IHS Inc., said in Vienna.

    OPEC has set a production target almost without interruption
    since 1982, though member countries often ignored it and pumped
    well above it. The ceiling of 30 million barrels a day, in place
    since 2011 and now abandoned as too rigid, is no exception.

    OPEC output has outstripped it for 18 consecutive months,
    according to data compiled by Bloomberg. Now the organization
    says it will keep pumping as much as it does now -- about 31.5
    million barrels a day -- effectively endorsing limitless output.

    The oversupply has sent the price of Brent, a global oil
    benchmark, to a six-year low, triggering the worst slump in the
    energy sector since the 2008 world financial crisis. It’s cut
    the profits of major oil companies such as Exxon Mobil Corp. and
    BP Plc in half while crude-rich countries such as Mexico and
    Russia have watched their currencies plunge and their coffers

    On Friday, there was no talk of even setting a production target
    that member countries could then disregard.

    ‘It’s Ceilingless’
    “Effectively, it’s ceilingless,” said Iranian Oil Minister Bijan
    Namdar Zanganeh. “Everyone does whatever they want.”

    Emmanuel Ibe Kachikwu, the Nigerian minister, reinforced the
    message, saying the market shouldn’t worry about the “semantics”
    of targets or real production.

    “We aren’t going to go back to a cartel and work against the
    customers -- that time has passed,” said United Arab Emirates
    Minister Suhail Al Mazrouei.

    Most of the market “doesn’t have any ceiling,” Iraqi Oil
    Minister Adel Abdul Mahdi told reporters. “Americans don’t have
    any ceiling. Russians don’t have any ceiling. Why should OPEC
    have a ceiling?”

    The prospect of OPEC, which accounts for roughly 40 percent of
    the world’s oil production, taking U.S. TV personality Sarah
    Palin’s advice to “drill, baby, drill” sent crude prices further
    downward. The U.S. benchmark dropped 5.7 percent between 8:14
    a.m. and 9:06 a.m. New York time on Friday, hovering around $40
    a barrel the rest of the session. On June 30, 2014, the price
    was $105.37 a barrel.

    The oversupply is likely to continue in the new year. Iran, for
    years under sanctions related to its nuclear program, has
    promised to lift its production to as much as 4 million barrels
    a day by the end of 2016, up from about 3.3 million barrels a
    day currently.

    Acrimonious End
    The meeting on Friday at times looked as if it might be headed
    to an acrimonious end, similar to a gathering in June 2011 when
    OPEC was unable to agree on policy and ministers openly attacked
    each other. At the time, Saudi Arabian Oil Minister Ali al-Naimi
    said he personally had had one of his “worst-ever” meetings.

    No official would go that far to describe this conference, yet
    when ministers and delegates left the OPEC building, near the
    iconic Vienna State Opera house, they were speechless and grim.
    Within an hour, some of the them, including representatives of
    Saudi Arabia and Iran, were heading to the airport. Al-Naimi
    said he was traveling to Paris to take part in climate-change
    talks. Delegates from Venezuela, which pushed hard to cut the
    old ceiling by about five percent, would only say OPEC “didn’t
    decide anything,” a sign of the deep frustration with the new
    policies in the cash-strapped South American country.

    Officials nonetheless did their best to conceal any division.
    Asked what arguments, if any, went on inside the small meeting
    room where OPEC ministers seclude themselves without the
    presence of aides, Iran’s Zanganeh simply said, “There were

    That was most likely polite understatement, as Iran’s rival,
    Saudi Arabia, carried the day. This time around, OPEC didn’t
    look like the group that American diplomat Henry Kissinger once
    described as able to blackmail national economies and whole
    industries. Instead, it looked like they might have spent the
    last few days bullying each other.

    http://www.bloomberg.com/news/articles/2015-12-04/opec-unity- shattered-as-saudi-led-policy-leads-to-no-limits-ihs9xu51

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  • From 116e32s@gmail.com@21:1/5 to Obamanomics on Sat Dec 19 15:59:57 2015
    On Saturday, December 5, 2015 at 12:24:14 PM UTC+8, Obamanomics wrote:
    OPEC abandoned all pretense this week of acting as a cartel.
    It's now every member for itself.

    Why has LNG not fallen as much as oil and coal?

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