Softpanorama

Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
May the source be with you, but remember the KISS principle ;-)
Bigger doesn't imply better. Bigger often is a sign of obesity, of lost control, of overcomplexity, of cancerous cells

Oil glut fallacy

News Peak Cheap Energy and Oil Price Slump Recommended Links OMG Cushing is filling up hysteria Great condensate con Energy returned on energy invested (ERoEI) A note of ERoEI decline
MSM propagated myth about Saudis defending this market share Deflation of the USA shale oil bubble MSM propagated myth about Saudis defending this market share Why Peak Oil Threatens the Casino Capitalism Subprime oil: Deflation of the USA shale oil bubble Links between oil and dollar under casino capitalism Iran return to western oil markets fearmongering
Russia oil production Energy Geopolitics Russian Ukrainian Gas wars The fiasco of suburbia Fiat money, gold and petrodollar The Great Stagnation Big Fukushima Debate
Casino Capitalism Inflation, Deflation and Confiscation All wars are bankers wars Why Peak Oil Threatens the International Monetary System Financial Quotes Financial Humor Etc

Since mid 2014 US MSM propagate the following bogus narrative: There is an oil glut in the USA market in particular despite the fact that the USA increasing their import of oil. To cry about glut on oil in the country which imports  more and more oil is something new to me.  That can happen only if some produced oil is subpar and nobody wants it (comment from blog post World oil supply and demand Econbrowser)

The Great Condensate Con?

We have seen a large year over year increase in US and global Crude + Condensate (C+C) inventories. For example, EIA data show that US C+C inventories increased by 100 million barrels from late 2014 to late 2015, and this inventory build has contributed significantly to the sharp decline in oil prices.

The question is, what percentage of the increase in US and global C+C inventories consists of condensate?

Four week running average data showed the US net crude oil imports for the last four weeks of December increased from 6.9 million bpd in 2014 to 7.3 million bpd in 2015. Why would US refiners continue to import large–and increasing–volumes of actual crude oil, if they didn’t have to, even as we saw a huge build in US C+C inventories? Note that what the EIA calls “Crude oil” is actually C+C.

I frequently cite a Reuters article that discussed case histories of refiners increasingly rejecting blends of heavy crude and condensate that technically meet the upper limit for WTI crude (42 API gravity), but that are deficient in distillates. Of course, what the refiners are rejecting is the condensate component, i.e., they are in effect saying that “We don’t want any more stinkin’ condensate.” Following is an excerpt from the article:

U.S. refiners turn to tanker trucks to avoid ‘dumbbell’ crudes (March, 2015)

http://www.reuters.com/article/2015/03/23/us-usa-refiners-trucks-analysis-idUSKBN0MJ09520150323

In a pressing quest to secure the best possible crude, U.S. refiners are increasingly going straight to the source.

Firms such as Marathon Petroleum Corp and Delek U.S. Holdings are buying up tanker trucks and extending local pipeline networks in order to get more oil directly from the wellhead, seeking to cut back on blended crude cocktails they say can leave a foul aftertaste. . . .

Many executives say that the crude oil blends being created in Cushing are often substandard approximations of West Texas Intermediate (WTI), the longstanding U.S. benchmark familiar to, and favored by, many refiners in the region.

Typical light-sweet WTI crude has an API gravity of about 38 to 40. Condensate, or super-light crude that is abundant in most U.S. shale patches, ranges from 45 to 60 or higher. Western Canadian Select, itself a blend, is about 20.

While the blends of these crudes may technically meet the API gravity ceiling of 42 at Cushing, industry players say the mixes can be inconsistent in makeup and generate less income because the most desirable stuff is often missing.

The blends tend to produce a higher proportion of fuel at two ends of the spectrum: light ends like gasoline, demand for which has dimmed in recent years, and lower-value heavy products like fuel oil and asphalt. What’s missing are middle distillates like diesel, where growing demand and profitability lies.

My premise is that US (and perhaps global) refiners hit, late in 2014, the upper limit of the volume of condensate that they could process, if they wanted to maintain their distillate and heavier output–resulting in a build in condensate inventories, reflected as a year over year build of 100 million barrels in US C+C inventories.

Therefore, in my opinion the US and (and perhaps globally) C+C inventory data are fundamentally flawed, when it comes to actual crude oil inventory data. The most common dividing line between actual crude oil and condensate is 45 API gravity, although the distillate yield drops off considerably just going from 39 API to 42 API gravity crude, and the upper limit for WTI crude oil is 42 API.

In 2015, the EIA issued a report on US C+C production (what they call “Crude oil”), classifying the C+C by API gravity, and the data are very interesting:

https://www.eia.gov/todayinenergy/detail.cfm?id=23952

Note that 22% of US Lower 48 C+C production consists of condensate (45+ API gravity) and note that about 40% of US Lower 48 C+C production exceeds the maximum API gravity for WTI crude oil (42 API). The above chart goes a long way toward explaining why US net crude oil imports increased from late 2014 to 2015, even as US C+ C inventories increased by 100 million barrels, and I suspect that what is true for the US may also be true for the world, in regard to the composition of global C+C inventories.

Following is my analysis of global C+C production data versus estimated global crude oil production data, through 2014, using the available data bases:

Did Global Crude Oil Production Peak in 2005?

http://peakoilbarrel.com/worldwide-rig-count-dropping-again/comment-page-1/#comment-546170

How Quickly Can US Tight/Shale Operators Cause US C+C Production to Increase?

Because of equipment, personnel and financial constraints, in my opinion it is going to take much longer than most analysts expect for US operators to ramp up activity, even given a rising price environment.

Except for the 2008 “V” shaped price decline (which bottomed out in December, 2008), and the corresponding US rig count decline, the US (oil and gas) rig count has been around 1,800 to 2,000 in recent years. Note that it took about five years to go from around 1,000 rigs in 2003 to around 2,000 rigs in 2008, and it even took two years to go from around 1,000 rigs in 2009 to around 2,000 rigs in 2011.

And assuming a 15%/year rate of decline in existing US C+C production and assuming a 24%/year rate of decline in existing US gas production, the US has to put on line around 1.5 million bpd of new C+C production every year and around 17 BCF per day of new gas production every year, just to offset declines from existing wells. Based on 2013 EIA data, the estimated annual volumetric loss of production from existing US gas production exceeds the annual dry gas production of every country in the world, except for the US and Russia.

Generally the idea of oil glut in the USA and simultaneously increasing imports is something from Orwell novel 1984, where is was called doublespeak. If you’re an oil producer, you don’t pump oil unless you have orders for it. If you pump oil without orders, then you need your own storage to store it. You don’t ship any oil without getting paid for it. So oil glut theory claim that they are producers which have oil stored instead of shipped to customers and nobody wants this oil. So it is rotting in storage instead. And this bogus "theory" is propagated by MSM for more then 18 month now.   The best example of article that subscribes to this fallacy I found in NYT:

Stock Prices Sink in a Rising Ocean of Oil

The world is awash in crude oil, with enough extra produced last year to fuel all of Britain or Thailand. And the price of oil will not stop falling until the glut shrinks.

The oil glut — the unsold crude that is piling up around the world — is a quandary and a source of investor anxiety that once again rattled global markets on Friday.

As prices have dropped, the amount of excess production has been cut in half over the last six months. About one million barrels of extra oil is now being dumped on the markets each day.

But that means the glut is still continuing to grow, and it could take years to work through the crude that is being warehoused, poured into petroleum depots or loaded onto supertankers for storage at sea.

The shakeout will be painful, taking an even bigger toll on companies, countries and investors.

I think the author never saw a real oil tanker and does not understand how much it costs to keep oil in tanker for, say, a year.  Regular lease of 200 barrel oil truck is around $4000 a month. and at $40 the cost of 200  barrels is just $8000. So don't try this in your backyard ;-).  An ultra-large crude carrier, with a 3 million barrel capacity can well cost around $40,000-60,000 a day. So in one day you burn 1000-1500 barrels (if we assume 40 pre barrel) of your stored oil. That comes to 10-15% of stored oil in one year just in leasing costs  (reuters.com)

As this is a skeptical page, one thing the creates strong doubts in MSM coverage of the current oil prices slump is the idea of oil glut and Saudis supposed decision to "defend their share of the market" by supposedly flooding the market with oil (in reality they were unable significantly raise their exports (only by 0.3 Mb/d in 2016) and used predatory pricing  since mid 2014 to slam the oil prices). There are strong indications that that was the political decision  make by Saudi elite to hurt Iran after decision to lift sanctions was made by G7+Russia in mid 2014. It is due to this decision the country  started to  dump their oil on the market at artificially low prices undercutting other producers. They simply presented discount for each region they sell for their oil, essentially putting a price on each barrel they sold. 

But to cry about glut on oil in the country that imports more and more oil is something new to me.  This is something from Orwell novel 19884 and is called doublespeak.  and that's was exactly the situation with the USA in 2015. So MSM are deceiving the public. But why and what is the real situation, if we can decipher it ? 

The first thing to understand is that at a given stage of developing of drilling and other related technologies there is such thing as minimal price of oil below which production can be continued only at a loss. After all a well often costs $8 million, which need to be amortized for life of well. Which in case of shale/tight oil is approximately five-six years with more half of oil extracted in the first two years. The cost is much higher for non-conventional oil producers then for conventional producers. Canadian tar sand production is even more expensive. Deep water drilling is somewhere in between conventional and non-conventional oil.

There are different estimates, but most analysts agree that shale/tight oil producers need around $70-$80 per barrel to be able to pay their debts and around $50-$60 to break even. Slightly less for deep water oil ($40-$50). The picture below illustrated difference prices to produce different types of oil (  see below) is reproduced from What Me Worry About Peak Oil Art Berman, December 27, 2015 ):

This means that production of light oil from tight zones need the price of $70-80 per barrel to break even.  The same applies to extra heavy, deep water, and EOR projects. The implication seems to be that most industry investments do require higher prices and 2010-2013 were gold age for this types of oil as prices were close or above $100.

There were elements of glut in condensate and light oil before export restrictions were lifted because the US refineries were tuned to different type of oil. some even rejected blended oil as output from such oil in various fractions was different from "classic" oil to which refineries got used and that was cutting their profits.  But that's about it.

The key problem for shale/tight oil companies is that they have chance to stay afloat only at around $70-$80 per barrel and most get to much debt in 2010-2013 trying to increase production to survive the current price slump. In North America, 42 companies with $17 billion in debt filed bankruptcy in 2015, the highest level since the financial crisis in 2008. Of these filings, 36 companies with $16.7 billion in debt filed in the U.S.

Here is an old article Crude oil is surging (May 21, 2015) that asks important question "How we can have a glut of oil one week and the next we don't "

Crude oil is having a big day. West Texas Intermediate crude oil rallied by more than 3% to cross back above the $60 per barrel mark. On Wednesday, the Energy Information Administration said that crude inventories fell by 2.7 million barrels last week.

It was the third straight week of declines in inventories, which have seen a huge swell in recent months to the highest levels in at least 80 years. Earlier this week, we highlighted comments from Morgan Stanley, noting that following the oil crash, drillers are now prioritizing profitability over their output of barrels.

Brent crude oil, the international benchmark, was also higher, up by more than 2%. Here's a chart showing the jump in WTI...

mad man

I can't understand, as everyone of us that are not greedy SOB's. How we can have a glut of oil one week and the next we don't . I wouldn't leave this country for another , I'll stand and fight for what we had in the past!

We have to rid this county of the #$%$S that think they are running it! Dem.'s or GOP's are all #$%$'s! . This is not for the PEOPLE BY PEOPLE any more. WE ALL have to try and fix it .

H e

Crude is surging because the US dollar has no backbone anymore and losing it's world's reserve currency status.

okeydokey

Market manipulation. Nothing more. As for Business Insider, this is a propaganda rag.

heybert17

I really enjoy reading all the expert opinions on oil. One says it will plummet, another says it will surge, and another says it will stay steady. What are these people "experts" of? It can't be oil or they would all say the exact same thing.

Here is another similar thread:

Ves, 12/25/2015 at 2:23 pm

Steve,

I agree with your post about market dynamics between customers having to pay through their purchasing power in order to retire loans created by financial industry for oil companies.

But there are a few things that make this oil crash little bit “strange” to say at least:

  1. OPEC (and mainly Saudis + GCC) did actually something by not doing anything and that is refusing to cut their production. Well that is “man made” decision as Oman oil minister said and not decision by invisible hand of market. I interpret this mainly as political decision and not economical.
  2. Second. Wall Street was pretty much shocked if not pissed by that Saudi decision. I interpret that to be political reaction as well.
  3. There is no worldwide collapse of demand that justify 65-70% fall of the oil price. I am sorry but Wall Street is creating ninja loans for cars, student loans, mortgages from the thin air with the same speed in the US. I would say that is political decision as well. Worldwide collapse is not happening as of now either that would justify 65-70% drop of price. Contraction is happening in Europe but very very gradually except in some marginal countries like Greece, and war torn countries in ME and Africa. But these marginal countries did not even have any big consumption to begin with.
  4. Shale oil producers based on their balance sheet were bankrupt from Day 1. Why LTO even got the loans to begin with? That is also political decision and not an economic. Why are we waiting even a year after low prices for any major mergers, buyouts or bankruptcies? I am sorry but 100% of LTO are bankrupt so why Wall Street is extending and pretending and keeping them on a life support? Well it is again political decision.

So yes there are some market dynamics around this oil crash but there are a lot of political dynamics as well.

likbez, 12/25/2015 at 3:44 pm
Ves,

Thanks for the post. I agree with your reasoning.

To me too such a dramatic drop of oil prices looks like an engineered event, and is not only the result of supply and demand discrepancies. I think coming online way too many projects served a role, but not a decisive role. There was a political will to achieve that result.

One factor that might be in play ( it is NOT 100% reliable info) is that Saudis appropriated all or large part of Iran quota during sanctions period.

So on July 14, 2014, when agreement about lifting sanctions was reached, Iran asked to Saudis to compensate them for all this period. Saudis refused and started all this fun with declarations that they will defend their market share by all means possible.

Obama was surprisingly strongly “pro-deal”: On Tuesday Obama promised to use his veto on any domestic attempts to undermine the deal. “I am confident that this deal will meet the national security needs of the United States and our allies, so I will veto any legislation that prevents the successful implementation of this deal,” he said.”

Subsequently “sell as much as you can” regime for all OPEC members was instituted during the last OPEC meeting — no countries quotas anymore. Which, in a way, is the dissolution of OPEC.

So this “conspiracy theory” presupposes that this was the way Saudis reacted to lifting Iran sanctions, which threatened their share of oil market and also empowered their bitter regional enemy due to high oil prices. And they probably were angry as hell about the US administration duplicity — betrayal of the most reliable ally in the region, after the same trick with Mubarak.

Also it might well be that the agreement to lift sanctions from Iran was explicitly designed as a perfect Trojan horse for dropping oil prices to ease pressure from G7 economies which were in “secular stagnation” state. With Europe suffering from the cut from Russian market. In this case this was a real masterpiece of “divide and conquer” strategy.

Ves, 12/25/2015 at 5:32 pm
Thanks likbez.

I don’t pay too much attention to the price because the price is just the consequence of what buyers and sellers agree on. So there is no “engineering” in the classic sense of how we interpret in the real life. What bothers me is the amount of new and unprofitable shale oil that come to the market in the relatively short period of time. Well that is political engineering.

I thought for a while that this is all classic bubble of greed but then that did not make sense either. We know that bankers like bubbles because they always make money on swings, either going up or down. And that is ok with me; I accept that is how things work on this planet. But they could make bubbles with tulips and make money too? It has been done before. Oil is little bit different. You don’t piss oil on these swings when you are not making any money even on upswing.

So it is kind a troubling to see what is really going on. It looks to me that some breakdown of communication happened between major oil producers and major bankers. But time will tell.


Top Visited
Switchboard
Latest
Past week
Past month

NEWS CONTENTS

Old News ;-)

[Feb 15, 2019] Consumption of liquid fuels grows over the next decade, before broadly plateauing in the 2030s

Highly recommended!
How they can claim that US tight oil will be produced in larger quantities if they predict stagnant oil prices and at those price the US production is unprofitable.
So from now on it's all condensate, and very little heavy and medium oil.
I like BP propaganda: "The abundance of oil resources, and risk that large quantities of recoverable oil will never be extracted, may prompt low-cost producers to use their comparative advantage to expand their market share in order to help ensure their resources are produced." That's not only stupid but also gives up the intent...
Notable quotes:
"... In the ET scenario, global demand for liquid fuels – crude and condensates, natural gas liquids (NGLs), and other liquids – increases by 10 Mb/d, plateauing around 108 Mb/d in the 2030s. ..."
"... All of the demand growth comes from developing economies, driven by the burgeoning middle class in developing Asian economies. Consumption of liquid fuels within the OECD resumes its declining trend. ..."
"... The increase in liquid fuels supplies is set to be dominated by increases in NGLs and biofuels, with only limited growth in crude ..."
www.bp.com

In the ET scenario, global demand for liquid fuels – crude and condensates, natural gas liquids (NGLs), and other liquids – increases by 10 Mb/d, plateauing around 108 Mb/d in the 2030s.

All of the demand growth comes from developing economies, driven by the burgeoning middle class in developing Asian economies. Consumption of liquid fuels within the OECD resumes its declining trend. The growth in demand is initially met from non-OPEC producers, led by US tight oil. But as US tight oil production declines in the final decade of the Outlook, OPEC becomes the main source of incremental supply. OPEC output increases by 4 Mb/d over the Outlook, with all of this growth concentrated in the 2030s. Non-OPEC supply grows by 6 Mb/d, led by the US (5 Mb/d), Brazil (2 Mb/d) and Russia (1 Mb/d) offset by declines in higher-cost, mature basins.

Consumption of liquid fuels grows over the next decade, before broadly plateauing in the 2030s

Demand for liquid fuels looks set to expand for a period before gradually plateauing as efficiency improvements in the transport sector accelerate. In the ET scenario, consumption of liquid fuels increases by 10 Mb/d (from 98 Mb/d to 108 Mb/d), with the majority of that growth happening over the next 10 years or so. The demand for liquid fuels continues to be dominated by the transport sector, with its share of liquids consumption remaining around 55%. Transport demand for liquid fuels increases from 56 Mb/d to 61 Mb/d by 2040, with this expansion split between road (2 Mb/d) (divided broadly equally between cars, trucks, and 2/3 wheelers) and aviation/marine (3 Mb/d). But the impetus from transport demand fades over the Outlook as the pace of vehicle efficiency improvements quicken and alternative sources of energy penetrate the transport system . In contrast, efficiency gains when using oil for non-combusted uses, especially as a feedstock in petrochemicals, are more limited. As a result, the non-combusted use of oil takes over as the largest source of demand growth over the Outlook, increasing by 7 Mb/d to 22 Mb/d by 2040.

The outlook for oil demand is uncertain but looks set to play a major role in global energy out to 2040

Although the precise outlook is uncertain, the world looks set to consume significant amounts of oil (crude plus NGLs) for several decades, requiring substantial investment. This year's Energy Outlook considers a range of scenarios for oil demand, with the timing of the peak in demand varying from the next few years to beyond 2040. Despite these differences, the scenarios share two common features. First, all the scenarios suggest that oil will continue to play a significant role in the global energy system in 2040, with the level of oil demand in 2040 ranging from around 80 Mb/d to 130 Mb/d. In all scenarios, trillions of dollars of investment in oil is needed Second, significant levels of investment are required for there to be sufficient supplies of oil to meet demand in 2040. If future investment was limited to developing existing fields and there was no investment in new production areas, global production would decline at an average rate of around 4.5% p.a. (based on IEA's estimates), implying global oil supply would be only around 35 Mb/d in 2040. Closing the gap between this supply profile and any of the demand scenarios in the Outlook would require many trillions of dollars of investment over the next 20 years.

Growth in liquids supply is initially dominated by US tight oil, with OPEC production increasing only as US tight oil declines

Growth in global liquids production is dominated in the first part of the Outlook by US tight oil, with OPEC production gaining in importance further out. In the ET scenario, total US liquids production accounts for the vast majority of the increase in global supplies out to 2030, driven by US tight oil and NGLs. US tight oil increases by almost 6 Mb/d in the next 10 years, peaking at close to 10.5 Mb/d in the late 2020s, before falling back to around 8.5 Mb/d by 2040. The strong growth in US tight oil reinforces the US's position as the world's largest producer of liquid fuels. As US tight oil declines, this space is filled by OPEC production, which more than accounts for the increase in liquid supplies in the final decade of the Outlook.

The increase in OPEC production is aided by OPEC members responding to the increasing abundance of global oil resources by reforming their economies and reducing their dependency on oil, allowing them gradually to adopt a more competitive strategy of increasing their market share. The speed and extent of this reform is a key uncertainty affecting the outlook for global oil markets (see pp 88-89).

The stalling in OPEC production during the first part of the Outlook causes OPEC's share of global liquids production to fall to its lowest level since the late 1980s before recovering towards the end of the Outlook.

Low-cost producers: Saudi Arabia, UAE, Kuwait, Iraq and Russia

Oil demand
Download chart and data Download this chart pdf / 64.6 KB Download this data xlsx / 10.1 KB
Excluding GTLs and CTLs

The abundance of oil resources, and risk that large quantities of recoverable oil will never be extracted, may prompt low-cost producers to use their comparative advantage to expand their market share in order to help ensure their resources are produced.

The extent to which low-cost producers can sustainably adopt such a 'higher production, lower price' strategy depends on their progress in reforming their economies, reducing their dependence on oil revenues.

In the ET scenario, low-cost producers are assumed to make some progress in the second half of the Outlook, but the structure of their economies still acts as a material constraint on their ability to exploit fully their low-cost barrels.

The alternative 'Greater reform' scenario assumes a faster pace of economic reform, allowing low-cost producers to increase their market share. The extent to which low-cost producers can increase their market share depends on: the time needed to increase production capacity; and on the ability of higher-cost producers to compete, by either reducing production costs or varying fiscal terms.

The lower price environment associated with this more competitive market structure boosts demand, with the consumption of oil growing throughout the Outlook.

Growth in liquid fuels supplies is driven by NGLs and biofuels, with only limited growth in crude oil production

The increase in liquid fuels supplies is set to be dominated by increases in NGLs and biofuels, with only limited growth in crude.

[Feb 15, 2019] S>omething like $150B in shale companies debt comes due between now and 2023.

US reserves are estimated by some to about 50 billion barrels. Oil production, along with reserve estimates, are growing in the US for one reason and one reason only, the advent of shale oil. Reserve estimates before 2008 were based on conventional oil.
Onshore conventional oil production in the USA is in steep decline. Shale oil production is intrinsically connected with financing and it produce along with oil a stream of junk bonds. At some point investors might do not want them of the bubble start deflating. Then what.
Notable quotes:
"... Next three years for Shale Drillers may be a problem. I believe something like $150B in debt comes due between now and 2023. That's a lot of debt to roll over, as well as take on more debt to fund CapEx. ..."
Feb 15, 2019 | peakoilbarrel.com

TechGuy: 02/15/2019 at 1:23 pm

Hugo Wrote:

"Dennis, with his calculation of a peak in 2025 + or – 3 years is about right."

That really depends on how much debt the Shale Drillers can take on, and presumes there is not another global recession before 2025. Next three years for Shale Drillers may be a problem. I believe something like $150B in debt comes due between now and 2023. That's a lot of debt to roll over, as well as take on more debt to fund CapEx.

Without constant US Shale production increases, world production peaks.

[Feb 15, 2019] Oil Rises as Aramco Said to Cut Output at Biggest Offshore Field

KSA and Russia together can drive oil price to anywhere they wish... Wall street sharks can do nothing with those giants if they cut oil output.
Notable quotes:
"... Russia plans to accelerate the output cuts it agreed to with OPEC+. ..."
Feb 15, 2019 | finance.yahoo.com

Oil climbed as Saudi Arabia was said to curtail some output from its Safaniyah offshore oil field, the largest in the world.

Futures in New York rose as much as 2.2 percent Friday, pushing toward its biggest weekly gain in a month. Saudi Arabia was said to trim supply from Safaniyah to repair a damaged power cable, while Russia plans to accelerate the output cuts it agreed to with OPEC+.

... ... ...

Saudi Arabian Oil Co.'s Safaniyah field has the capacity to pump 1.2 million to 1.5 million barrels of crude a day, and is a major component of the Arab Heavy grade. The cable was damaged in an accident about two weeks ago and repairs are expected to be completed by early March, people with knowledge of the matter said.

[Feb 15, 2019] Global shortage of medium to heavy sour crude

Notable quotes:
"... Global shortage of medium to heavy sour crude: Cuts from OPEC, Canada and potentially Venezuela have increased the price of medium and heavy crude oils. The Mars benchmark, a medium, sour crude produced in the Gulf of Mexico, has moved to above par with Light Louisiana Sweet. ..."
"... several medium to heavy sour crude grades produced in the Middle East are now trading at a premium to Brent. ..."
Feb 12, 2019 | Oil Sands Magazine

Global shortage of medium to heavy sour crude: Cuts from OPEC, Canada and potentially Venezuela have increased the price of medium and heavy crude oils. The Mars benchmark, a medium, sour crude produced in the Gulf of Mexico, has moved to above par with Light Louisiana Sweet.

Western Canadian Select (WCS) prices in the Gulf Coast also rose above par with the West Texas Intermediate (WTI) benchmark at the end of January. WCS trades at a US$10/bbl discount to WTI in Alberta, but now sells at a US$1.50 premium in Houston.

A similar effect is being seen globally, as several medium to heavy sour crude grades produced in the Middle East are now trading at a premium to Brent.

[Feb 15, 2019] You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be.

Highly recommended!
Notable quotes:
"... I have been suspicious for some time that production numbers can be corrupted by fuzzy definitions. ..."
"... You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. ..."
Feb 15, 2019 | peakoilbarrel.com

Watcher: 02/15/2019 at 4:24 am

I have been suspicious for some time that production numbers can be corrupted by fuzzy definitions. Iran is being sanctioned, but Iran shares that enormous gas field under the Persian Gulf with Qatar. Gas production yields condensate and it yields NGLs.

High vapor pressure NGLs get labeled liquefied petroleum gas, and that is used for transportation fuel in India. Pentane Plus is used or called something akin to natural gasoline.

You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. Iran is using this to dodge sanctions, or they did use it when condensate was not restricted. Don't recall if that loophole was closed in the current sanctions. That would be a good thing to know.

The same thing can happen with shale. We hear all sorts of talk about how much gas is being flared and how much gas is being captured, and you know perfectly well there has to be condensate involved. There was an article a year or so ago about NGL capture in the Bakken, but I don't recall any follow-up. It shouldn't take too much of a stretch on the part of state regulators to find a way to count the high vapor pressure portion of NGL as oil.

likbez: 02/15/2019 at 7:27 pm

You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be.

Exactly. And this, in turn, allows Wall Street to suppress the price of "prime oil" using fake production numbers, fake storage glut (which is essentially condensate glut) and similar tricks. Please note that the US refineries consume mainly "prime oil" while the USA mainly produces (and tries to export at a discount) "subprime oil."

Pretty polished and sophisticated racket. It might well be that shale oil companies are partially financed from those Wall Street profits as nobody in serious mind expect those loans to be ever repaid.

So OPEC cuts are the only weapon that OPEC countries have against this racket.

In any case, I think all those nice charts now need to be split into "prime oil" and subprime oil parts and analyzed separately. In the current conditions, treating "heavy oil" and condensate as a single commodity looks to me like pseudoscience.

[Feb 15, 2019] Saudi Aramco halted oil output this week at Safaniyah, the world's largest offshore oilfield

Notable quotes:
"... The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence Group tweeted Thursday, adding that the heavy crude oil market was already tight because of the OPEC output cuts and U.S. sanctions on both Iran and Venezuela. ..."
Feb 15, 2019 | peakoilbarrel.com

Greenbub x Ignored says: 02/14/2019 at 6:06 pm

Saudi Aramco halts oil output at the world's largest offshore oilfield: report

Saudi Aramco halted oil output this week at Safaniyah, the world's largest offshore oilfield, Energy Intelligence reported Thursday, citing sources familiar with the matter, according to a tweet from Amena Bakr, senior correspondent at the news and research service provider. Further information was only available through subscription-based Energy Intelligence.

The potential impact on oil prices depends on how long output at the oilfield is down, said Phil Flynn, senior market analyst at Price Futures Group.

"The thinking is that the field produces heavy crude, and the world is short of that [type of] oil."

The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence Group tweeted Thursday, adding that the heavy crude oil market was already tight because of the OPEC output cuts and U.S. sanctions on both Iran and Venezuela.

In electronic trading, March WTI oil CLH9, +1.06% was at $54.51 a barrel, after settling at $54.41 on the New York mercantile Exchange.

~Marketwatch

[Feb 15, 2019] True KSA reserves are very likely somewhere in the neighborhood of 70 billion barrels.

Feb 15, 2019 | peakoilbarrel.com

Ron Patterson x Ignored says: 02/14/2019 at 4:37 pm

I had to google the link, but it was not hard to find.

How Much Oil Does Saudi Arabia Really Have?

Okay, you will have to read the article to see how Robert arrived at his conclusion. But his conclusion is:

So, I have no good reason to doubt Saudi Arabia's official numbers. They probably do have 270 billion barrels of proved oil reserves.

I find his logic horribly flawed. Robert compares Saudi's growing reserve estimates with those of the USA.

First, the US Securities and Exchange Commission have the strictest oil reporting laws in the world, or did have in 1982. Also, better technology has greatly improved reserve estimates. And third, the advent of shale oil has dramatically added to US reserve estimates.

Saudi has no laws that govern their reserve reporting estimates.

From Wikipedia, US Oil Reserves: Proven oil reserves in the United States were 36.4 billion barrels (5.79×109 m3) of crude oil as of the end of 2014, excluding the Strategic Petroleum Reserve. The 2014 reserves represent the largest US proven reserves since 1972, and a 90% increase in proved reserves since 2008.

Robert says US reserves are 50 billion barrels. I don't know where he gets that number but it really doesn't matter. Oil production, along with reserve estimates, are growing in the US for one reason and one reason only, the advent of shale oil. Reserve estimates before 2008 were based on conventional oil. Onshore conventional oil production in the USA is in steep decline.

Robert Rapier is brillant oil man, but a brilliant downstream oil man. Refineries are his forte. He should know better than the shit he produced in that article.

100 percent of Saudi Arabia's reserves are based on conventional oil. Their true reserves are very likely somewhere in the neighborhood of 70 billion barrels.

[Feb 15, 2019] Opec spare capacity and the difference between "prime oil" and "subprime oil."

Notable quotes:
"... If you take a look at PXD announcements, I reach the conclusion that Permian is slowing ..."
Feb 15, 2019 | peakoilbarrel.com

Hugo

x Ignored says: 02/14/2019 at 2:35 am
OPEC spare capacity is now around 2 million barrels per day.

OPEC has cut production by 1.5 million barrels per day in the last 2 months.

Besides that Saudi Arabia and Kuwait have ended their dispute over the neutral zone, which will add another 500,000 of spare capacity.

https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Kuwait-Discuss-New-Oil-Production-In-Neutral-Zone.html

IN the longer term Saudi Arabia will add another 1mmbd to it's capacity over the next few years.

https://www.reuters.com/article/us-oil-opec-falih-investment/saudi-arabia-to-invest-20-billion-in-spare-oil-production-capacity-idUSKCN1ME111

likbez says: 02/14/2019 at 4:51 pm
As Ron Patterson explained several times here, OPEC members cheat. They cut from the elevated, unsustainable level, achieved specifically to accommodate cuts.

So "after cut" level is often not that different from a reasonable "normal," sustainable production level in their current production conditions, plus some, related to previously delayed maintenance, shutdowns.

Four years of capital underinvestment bite production both in OPEC and non-OPEC. So talking about excess capacity is somewhat problematic and we now need to distinguish between "prime oil" and "subprime oil."

Most people who talk about "excess capacity" are interested in lower oil price (the list includes US and EU governments ) That's why condensate and other "subprime oil" is counted in total oil output. Supply of "prime oil" now is stressed.

In other words, everything connected with oil is now politically charged. That means that it is not wise to take IEA data and their forecasts at face value. It should be viewed as an opinion of the agencies deeply (institutionally) interested in the low oil price.

You need the ability to read between the lines, much like readers of the press in the USSR. And as several experts here do. You need the acute ability to cut through "official bullsh*t".

And neutral expert opinion is very difficult to come by. That's why this blog has so much value.

Watcher x Ignored says: 02/14/2019 at 3:44 am
Heads up. Some scroll upwards there is a quoted article from oilprice.com.

The writer is Nawar Alsaadi. I suspect we fell victim of presumption. He has an Arabic sounding name, and that leads us to suspect he knows something about oil.

Look into this guy. There's nothing ugly or horrible about his background, but there is nothing in it that shouts out expert. He is a writer. Including publishing fiction.

He's also "with" some investment firm. Turns out he's president and CEO of the firm and conveniently an employee count is not easily found.

Ned x Ignored says: 02/14/2019 at 3:58 am
I'm curious – does anybody know, by the data trends, which OPEC country is likely to run so low on oil that they become a net importer, next? I do understand this event may take some time to occur.
Krishnan Viswnathan x Ignored says: 02/14/2019 at 11:17 am
If you take a look at PXD announcements, I reach the conclusion that Permian is slowing. Like Dennis Coyne, I look at growth after fourth quarter 2018. Oil production in fourth quarter is 199.2 Kilo barrels/day. The guidance for 2019 is between 203 to 213 Kilo barrels/day. PXD is spending 300 MM dollars for gas processing and water treatment infrastructure.

[Feb 15, 2019] Mankind probably has another trillion barrels at best to consume in the future in addition to the 1.3 trillion already consumed.

Which means around 30 years at the current consumption rate
Feb 15, 2019 | peakoilbarrel.com

Ron Patterson x Ignored says: 02/14/2019 at 5 :39 pm

Food for thought

I just did a little math using OPEC's estimate of OPEC and Non-OPEC World proven oil Reserves.

OPEC says they have 1214.21 billion barrels of proven reserves. And they say non-OPEC has 268.56 billion barrels of proven reserves. Average OPEC C+C production, over the last four years, has been 12.78 billion barrels per year according to the EIA. The EIA says the average non-OPEC C+C production over the last four years has been 16.8 billion barrels per year.

Okay, here is the killer. If those numbers are correct then the average non-OPEC nation has an R/P ratio of 16 while the average OPEC nation has an R/P ratio of 95. If you think those R/P ratio numbers are even remotely correct then I have a bridge I would like to sell you.

Ravi x Ignored says: 02/14/2019 at 11:05 pm
Ron,

I agree that the R/P numbers seem very suspicious. But if this is true then OPEC reserves are closer to 400-500 billion barrels not 1.2 trillion barrels. That would give us another trillion barrels at best to consume in the future in addition to the 1.3 trillion already consumed. This brings the URR to 2.2-2.5 trillion barrels at best including extra heavy. What do you think of the URR of 3.1 trillion barrels that is commonly assumed? Also canadian tar sands and venezuelan heavy oil have very low EROI which brings down the extractable oil reserves further. Do you think that is taken into account?

[Feb 14, 2019] Emerging 'Quality' Problem To Haunt Oil Markets

Feb 14, 2019 | oilprice.com

...OPEC+ production cuts could erase the supply surplus in the near future. Saudi Arabia has promised to cut more than required, lowering output in January by 350,000 bpd while also promising another 500,000 bpd cut by March.

"[C]ore-OPEC producers are adopting a 'shock and awe' strategy and exceeding their cut commitment," Goldman Sachs said in a note, predicting that Brent oil prices will average $67.50 per barrel in the second quarter.

[Feb 14, 2019] Too much condensate, too little heavy oil problem to haunt oil markets

Feb 14, 2019 | oilprice.com

To accommodate steadily rising barrels of light oil, OPEC and its non-OPEC partners have backed out their own supplies in order to prevent a crash in prices. But many OPEC members produce medium and heavier blends.

The quantity of global supply may not be vastly different, but the quality of the crude slate has changed dramatically. Refiners cannot easily swap out one type for another. The upshot is that the world is seeing a glut of light oil at a time when supply of medium and heavier barrels are relatively tight.

... ... ...

U.S. sanctions against Venezuela and Iran are magnifying this trend, knocking even more medium and heavier barrels off of the market.

... ... ...

The IEA said that these quality differences could cause some problems this year. "In quantity terms, in 2019 the US alone will grow its crude oil production by more than Venezuela's current output," the agency wrote in its Oil Market Report published Wednesday. "In quality terms, it is more complicated. Quality matters."

[Feb 13, 2019] Condensate can't replace heavy oil

IEA is one-half EU marketing agency with the explisit goal to keep oil price low, and one half a research organization. In different reports one role can be prevalent.
The U.S. Energy Information Administration (EIA) estimates that margins for U.S. Gulf Coast refiners have declined to the lowest levels since late 2014, based on recent price trends in certain grades of crude oil and petroleum products. https://www.eia.gov/petroleum/weekly/
Comment on Yahoo are absolutly idiotic. I have dount only a couple more or less reasonable comment in the first 48. This level of incompetence and brainwashing is simply amazing.
Feb 13, 2019 | news.yahoo.com

The "call" on OPEC crude is now forecast at 30.7 million bpd in 2019, down from the IEA's last estimate of 31.6 million bpd in January.

U.S. sanctions on Iran and Venezuela have choked off supply of the heavier, more sour crude that tends to yield larger volumes of higher-value distillates, as opposed to gasoline. The move has created disruption for some refiners, but has not led to a dramatic increase in the oil price in 2019.

"In terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations (from Venezuela sanctions)", the Paris-based IEA said.

"Stocks in most markets are currently ample and ... there is more spare production capacity available."

Venezuela's production has almost halved in two years to 1.17 million bpd, as an economic crisis decimated its energy industry and U.S. sanctions have now crippled its exports.

Brent crude futures have risen 20 percent in 2019 to around $63 a barrel, but most of that increase took place in early January. The price has largely plateaued since then, in spite of the subsequent imposition of U.S. sanctions.

"Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018," the IEA said.

"In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela's current output. In quality terms, it is more complicated. Quality matters."

dlider909, 7 hours ago Story will change in 30 days.

Robert, 7 hours ago ... ... ...

What this report fails to do is to pay the appropriate homage to American oilfield roughnecks...

ralf

7 hours ago Nonsense. I see military action against Venezuela soon, just because of our thirst for oil.
Talk about shale is like talk about Moon conquests, not supported by hard facts.

[Feb 13, 2019] Oil gains 2 percent as Saudi Arabia readies more supply cuts

Feb 13, 2019 | finance.yahoo.com

Saudi Arabia planning to drop March crude output by more than a half a million barrels per day below its initial pledge.

... ... ...

OPEC said on Tuesday it had reduced oil production almost 800,000 bpd in January to 30.81 million bpd under its voluntary global supply pact.

Saudi Arabia Energy Minister Khalid al-Falih told the Financial Times that the kingdom would reduce cut production to about 9.8 million bpd in March to bolster oil prices.

[Feb 13, 2019] Declining GOM output in 2019 is a more likely scenario then IEA prediction of increase of production

Notable quotes:
"... they expect maybe 200 kb/d higher output in the GOM and my interpretation of George Kaplan's and SouthLaGeo's recent comments is that flat or possibly declining GOM output is a more likely scenario. ..."
Feb 13, 2019 | peakoilbarrel.com

Energy News, 02/12/2019 at 2:29 pm

The EIA's STEO released today.
https://www.eia.gov/outlooks/steo/
They forecast US C+C production to increase +0.79 million barrels per day during 2019
From Dec 2018 11.93 million barrels per day
To Dec 2019 12.72 million barrels per day
Dennis Coyne, 02/12/2019 at 4:12 pm
The EIA's forecast might not be too far off, but I think they expect maybe 200 kb/d higher output in the GOM and my interpretation of George Kaplan's and SouthLaGeo's recent comments is that flat or possibly declining GOM output is a more likely scenario.

[Feb 12, 2019] Venezuela production should take a larger drop in February.

Feb 12, 2019 | peakoilbarrel.com

Fernando L x Ignored says: 02/12/2019 at 5:36 pm

Venezuela production should take a larger drop in February. Today Interim President Guaidó announced Feb 23 would be the day a big push would be made to push humanitarian aid columns into Venezuela. Collection points for food and medicine are now available in Colombia and Brazil, and others are being prepared.

Maduro moved 700 special forces (FAES) which are usually kept serving as death squads in large cities, to cover the bridges between Ureña in Venezuela and Cucuta in Colombia, with orders to fire on the humanitarian relief trucks. Guaidó responded the border was plenty long and Maduro lacked enough FAES and Cubans to stop the relief from crossing the border. He also pointed out that if Maduro had to use death squads to patrol the border it meant he didn't trust the Army, the National Guard or the National Police, so he asked for volunteers inside Venezuela to help overcome Maduro's thugs with sheer numbers.

Today it became very common to see an individual scream "Maduro!" and the crowd respond "f k you!". It's the way people pass the time at metro stations and while waiting in line. And the police seem to have abandoned the usurper, because they seldom do anything about it.

[Feb 12, 2019] Oil gains 2 percent

Feb 12, 2019 | finance.yahoo.com

Rising oil prices help Venezuela more than it helps the rest of OPEC because Venezuela needs the money more.

[Feb 12, 2019] OPEC January Production Data " Peak Oil Barrel

Feb 12, 2019 | peakoilbarrel.com

OPEC + Russia, down 1,590,000 barrels per day since October, should be enough to move the market. And it does seem to be up about 1.5% this morning.

[Feb 12, 2019] Sanctions, OPEC cuts push Asia's heavy crude oil prices above Brent

Feb 12, 2019 | finance.yahoo.com

Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten supply of medium to heavy oil, traders and analysts said.

Heavier grades, mainly produced in the Middle East, Canada and Latin America, typically have a high sulphur content and are usually cheaper than Brent, the benchmark for lighter oil in the Atlantic Basin.

[Feb 09, 2019] As of 2017, Rosneft controlled 13% of Venezuela's crude exports

Notable quotes:
"... Last year, oil production dropped by 37% compared with 2017. So, Maduro has been struggling to pay back the loans and last year, Sechin had to fly to Caracas to negotiate with the Venezuelan leader over delayed oil supplies. ..."
Feb 09, 2019 | www.asiatimes.com

As of 2017, Russia controlled 13% of Venezuela's crude exports, Reuters reported . According to some experts, Rosneft has been taking advantage of Venezuela's difficulties to secure deals which will be profitable in the long term.

... ... ...

The beleaguered country's economy is on the verge of collapse and the oil sector, which accounts for over 90% of national export revenues, has not been spared. Last year, oil production dropped by 37% compared with 2017. So, Maduro has been struggling to pay back the loans and last year, Sechin had to fly to Caracas to negotiate with the Venezuelan leader over delayed oil supplies.

Russia's concern about a collapse in Venezuela's economy is tangible. A delegation of high-ranking Russian officials flew to Caracas in October to advise the government on how to overcome the crisis. With the country in a state of turmoil, Russia's Deputy Minister of Finance Sergei Storchak said he expects Venezuela to struggle to repay its debt, and the next $100 million tranche is due next month.

[Feb 08, 2019] The US dollar is used for the international oil and gas trade and a wide part of global trade. This gives the US an exorbitant privilege to sanction countries it opposes and impose its conditions for oil trading

Feb 08, 2019 | off-guardian.org

Narrative says Feb, 1, 2019

Nations should explore better system to break US hegemony

"The US dollar is used for the international oil and gas trade and a wide part of global trade. This gives the US an exorbitant privilege to sanction countries it opposes.
..
The latest sanctions on Venezuela's state-owned oil company aim to cut off source of foreign currency of Venezuelan strongman Nicolas Maduro's government and eventually force him to step down.
..
A new mechanism should be devised to thwart such a vicious circle"

http://www.globaltimes.cn/content/1137847.shtml

crank says Feb, 1, 2019
Francis Lee; Big B,

OK I phrased that badly.

My question is really about those at the top of the power pyramid (those few hundred families who own the controling share of the wealth of the world) -- those who position idiots like Bolton to do their work, do they comprehend 'exergy' decline ?

If we can, then can they not? I agree with Parenti that they are not 'somnambulists'. They are strategists looking out for their own interests, and that means scrutinising trends in political movements, culture, technology and, well, just about everything. I find it hard, the idea that all these people -- people who have seen their businesses shaped by resource discovery, exploitation and then depletion, have no firm grasp on the realities of dwindling returns on energy.

The models were drawn up 47 years ago. I think that some of them at least, do understand that economic growth is coming to a halt, and have understood for decades. If true then they are planning that transition in their favour.

These hard to swallow facts about oil are still on the far fringes of any political conversation. The neoliberal cultists are deaf to them for obvious reasons; the socialist idealists believe that a 'New Deal' can lead us off the death train, but mostly ignore the intractable relationship between energy decline and financial problems; even the anarchists want their work free utopia run by robots and AI but stop short of asking whether solar panels and wind turbines can actually provide the power for all that tech. It's the news that nobody wants to think about, but which they will be forced to thinking about in the very near future.

The Twitter feed 'Limits to Growth' has less than 800 followers (excellent though it is).

BigB says Feb, 1, 2019
Crank

I do not want to get into the mind of the Walrus of Death Bolton! I do not want to know what he does, as he does. But at lower levels of government, and corporatism, there is an awareness of surplus energy economics. And as Nafeez has also pointed out, the military (the Pentagon) are taking an interest. And though it could rapidly change, who really appreciates the nuances of EROEI? I'm guessing at less than a single percent of all populations? And how many include its effects in a integrated political sense?

Its appreciation is sporadic: ranging from tech-utopia hopium to a defeated fatalism of the inevitability of collapse. Unless and until people want to face the harshness of the reality that capitalism has created: we are going to be involved in a marginal analysis. There are very few people who have realised that capitalism is long dead.

Dr Tim Morgan estimates that world capitalism has conservatively had $140tn in stimulus since 2008 -- without stimulating anything or reviving it at all. In fact, that amounts to the greatest robbery in history -- the theft of the future. Inasmuch as they can, those unrepayable debts -- transferred to inflate the parasitic assets of capitalists -- will be socialised. Except they cannot be. Not without surplus energy.

https://surplusenergyeconomics.wordpress.com/2019/01/20/145-fire-and-ice-part-two/

Brexit, gilets jaunes, Venezuela, unending crises in MENA, China's economic slowdown, etc -- all linked by EROEI.

It is a common socio-politico-economic energy nexus -- but linked together by whom? And the emergent surplus energy-mind-environmental ecology nexus? All the information is available. The formation of a new political manifesto started in the 1960s with the New Left but it seems to have been in stasis since. Perhaps this might stimulate the conversation.

According to Nate Hagens: there is 4.5 years of human muscle power leveraged by each barrel of oil. We are all going to be working for a very long time to pay back the debts the possessing classes have built up for us -- with absolutely no marginal utility for ourselves.

We are subsidising our own voluntary slavery unless we develop an emergent ecosocialist and ecosophical alternative to carbon capitalism. We cannot expect paleoconservative carbon relics like Bolton -- or anyone else -- to do it for us. The current political landscape is dominated by a hierarchical, vested interest, carbon aristocracy. We can't expect that to change for our benefit any time ever. Expect the opposite.

BigB says Feb, 2, 2019
Graeber has a point, though. We could already have a post-scarcity, post-production society but for the egregious maldistribution of resources and employment. Andre Gorz said as much 50 years ago (Critique of Economic Reason). Why do we organise around production: it makes no sense but for the relations of production are, and remain, the relations of hierarchical rule. So long as we assign value to a human life on the basis of meritocratic productivity -- we will have dehumanisation, marginalisation, and subjugation (haves and have nots). So why not organisation around care, freedom and play?

Such a solution would require the transversalistion of society and not-full-employment: so that no part of the system is subordinate, and no part is privileged. All systems and sub-ordinate (care) systems would be co-equal, of corresponding value and worth. So, without invoking EROEI, that would go a long way to solve our exergy, waste, pollution, and inequality problems. It is the profligate, unproductive superstructure: supporting rentier, surplus energy accumulating, profit-seeking suprasocieties -- that squanders our excess energy and puts expansive spatio-temporal pressures on already stretched biophysical ecological systems that engenders potential collapse. It is their -- the possessing classes -- assets that are being inflated, at our environmental expense. When it comes to survivability, we cannot afford a parasitic globalised superstructure draining the host -- the ecologically productive base. Without the over-accumulation, overconsumption, and wastage (the accursed share) associated with the superstructure of the advanced economies -- and their cultural, credit, military imperialisms I expect we could live quite well. Without the pressures of globalised transportation networks, and unnecessary military budgets -- the pressure on oil is minimised. It could be used for the 1001 other uses it has, rather than fuelling Saudi Eurofighters bombing Yemeni schoolchildren, for instance. The surplus energy could be used to educate, clothe and feed them instead. That would be a better use of resources, for sure.

If we took stock of what we really have, and what we really are -- a form of spiritual neo-self-sufficiency, augmented and extended into co-mutual care and freedom valorising ecologies we wouldn't need to chase the perceived loss all over the globe, killing everything that moves. The solutions are not hard, they are normative, once we are shocked out of this awful near-life trance state of separationism. Thanks for the link.

crank says Feb, 2, 2019
It seems to me that there are two parallel arguments going on.
One is about social organisation, attitudes towards and policies determining work, money, paid employment, technological development and the distribution of weath.
The other is fundamentally based on the laws of thermodynamics and concerns resource limits, energy surpluses, the role of 'stored sunlight' in producing things and doing work for each other, pollution and projections about these into the future.

I am surprised that Graeber (just as an example) seems to basically ignore the second of these even though he clearly is an incisive thinker and makes good points about the first. It is taken as a given that, theoretically at least, human civilisation could re-organise around a new ethic, transform the economy into a 'caring economy', re-structure money, government and do away with militarism. In terms of what to do now, as an individual, what choices to make, it is disconcerting to me when talk of these ideals seems to ignore those latter questions about overshoot.

I wonder if the egalitarian nature of much of indiginous North American society was inescapably bound with the realities of a low population density, low technology, intimate relationship with the natural world and a culture completely steeped in reverence for Mother Earth.
The talk I hear from Bastani or Graeber along the lines of 'we could be flying around in jet packs on the moon, if only society was organised sensibly' rings hollow to me.

BigB says Feb, 2, 2019
Crank

Welcome to my world! Apart from as a managerial tool, systems thinking has yet to catch on in the wider population. According to reductive materialism: there are two unlinked arguments. According to Dynamic Systems Theory (DST) there is only one integrated argument -- with two inter-connected correlative aspects. We can only organise around what we can energetically afford. Consequently, we cannot organise around what we cannot afford -- that is, global industrialised production with a supervenient elitist superstructure.

Let's face it : ethical arguments carry little weight against organisation around hierarchical rule. The current talk of an ethical capitalism -- in mixed economies with 'commons' elements -- is an appeasement. and distractional to the gathering and ineluctable reality.

The current (2012) EROI for the UK is 6.2:1 -- barely above the 'energy cliff' of 5:1. The GDP 'growth' and bullshit jobs are funded by monetised debt (we borrow around £5 to make every £1 -- from Tim Morgan's SEEDS). From the Earth Overshoot Day website: the UK is in economic overshoot from May 8th onward.

These are indicators that we will not be "flying jetpacks on the moon": even if we reorganise. Everyone, and I mean everyone, will have to make do with less. A lot less. Everything would have to be localised and sustainable. Production would be minimised, and not at all full. Two major systems of production -- food (agroecology) and energy -- would have to be sustainable and self-sovereign. And financialisation and the rentier, service economy? Now you can see why no one, not even Dave the crypto-anarchist, is talking about reality. Elitism, establishment and entitlement do not figure in an equitable future. We can't afford it, energetically or ethically.

So when will the debate move on? Not any time the populace is bought into ideational deferred prosperity. All the time that EROEI is ignored as the fundamental concept governing dwindling prosperity -- no one, and I mean no one, will be talking about a minimal surplus energy future. The magic realism is that the economic affordances of cheap oil (unsustainably mimicked by debt-funding) will return sometime, somehow (the technocratic superfix). The aporia is that the longer the delay, the less surplus energy we will have available to utilise. Something like the Green New Deal -- that has been proposed for around two decades now -- may give us some quality of life to sustain. Pseudo-talk of a Customs Union, 'clean' coal, and nuclear power, will not.

An integrated reality -- along the model of Guattari's 'Three Ecologies' -- of mind, economy, and environment is well, we are not alone, but we are ahead of the curve. The other cultural aporia is that we need to implement such vision now. Actually, about thirty years ago but let's not get depressive!

We are going to need that cooperative organisation around care and freedom just to get through the coming century.

crank says Jan, 31, 2019
As mentioned elsewhere here, Venezualan oil deposits are not all that the hype cracks them up to be. They are mostly oil sands that produce little in the way of net energy gain after the lengthy process of extraction.The Venezuala drama is about the empire crushing democracy (i.e. socialism), not oil. [not that this detracts from Kit's essential point in the article].
The Left (as well as the Right), by and large have not come to terms with the realities of the decline in net surplus energy that is unfolding around the world and driving the political changes that we see. So they still view geopolitics in terms of the oil economy of pre-2008.
The productive economies of Europe are falling apart (check Steve Keen's latest on Max and Stacy -- although even i he doesn't delve into the energy decline aspect).
The carbon density of the global economy has not changed in the 27 years since the founding of the UNFCCC.

The Peak Oil phenomenon was oversimplified, misrepresented and misunderstood as a simple turning point in overall oil production. In truth it was a turning point in energy surplus.
I predict that by the end of this or next year, everyone will be talking about ERoEI. Everyone will realise that there is no way out of this predicament. Maybe there are ways to lessen the catastrophe, but no way to avert it. This will change the conversation, and even change what 'politics' means (i.e. you cannot campaign on a 'new start' or a 'better, brighter future' if everyone knows that that physically cannot happen).
Everyone will understand that their civilisation is collapsing.
Does Bolton understand this?

I dunno.
https://medium.com/insurge-intelligence/brexit-stage-one-in-europes-slow-burn-energy-collapse-1f520d7e2d89

Francis Lee says Jan, 31, 2019
"Does Bolton Understand this/? I think this might qualify as a rhetorical question.
BigB says Feb, 1, 2019
Crank

If you were referring to my earlier comments about Venezuelan extra heavy crude: it's still massively about the oil. The current carbon capitalist world system does not understand surplus energy or EROEI, as it is so fixated on maximal short term returns for shareholders. It can't comprehend that their entire business model is unsustainable and self cannibalising. Which is bad for us: because carbon net-energy (exergy) economics it is foundational to all civilisation. The ignorance of it and subsequent environmental and social convergence crises threatens the systemic failure of our entire civilisation. The Venezuelan crisis affects us all: and is symptomatic of a decline in cheap oil due to rapidly falling EROEI.

I can't find the EROEI specifically for Venezuelan heavy oil: but it is only slightly more viscous than bitumen -- which has an EROEI of 3:1. Let's call it 4:1: the same as other tight oils and shale. Anything less than 5:1 is more or less an energy sink: with virtually no net energy left for society. The minimum EROEI for societal needs is 11:1. Does Bolton understand this? Francis hit the nail on the head there.

Do any of our leaders? No. If they did, a transition to decentralisation would be well under way. Globalised supply chains are systemically threatened and fragile. A globalised economy is spectacularly vulnerable. Especially a debt-ridden one. Which way are our leaders trying to take us? At what point will humanity realise we are following clueless Pied Pipers off the Seneca Cliff -- into globalised energy oblivion?

The rapid investment -- not in a post-carbon transition -- but in increased militarisation, and resource and market driven aggressive foreign intervention policies reveal the mindset of insanity. As people come to understand the energy basis of the world crisis: the fact of permanent austerity and increased pauperisation looms large. What will the outcome be when an armed nuclear madhouse becomes increasingly protectionsist of their dwindling share? Too alarmist, perhaps? Let's play pretend that we can plant a few trees and captive breed a few rhinos and it will all be fine. BAU?

The world runs on cheap oil: our socio-politico-economic expectations of progress depend on it. Which means that the modern human mind is, in effect, a thought-process predicated on cheap oil. Oleum ergo sum? Apart from the Middle East: we are already past the point where oil is a liability, not a viability. Debt funding its extraction, selling below the cost of production -- both assume the continual expansion of global GDP. Oil is a highly subsidised -- with our surplus socialisation capital -- negative asset. We foot the bill. A bill that EROEI predicts will keep on rising. At what point do we realise this? Or do we live in hopium of a return to historical prosperity? Or hang on the every word of the populist magic realism demagogue who promises a future social utopia?

If it's based on cheap oil, it ain't happenin'.

BigB says Feb, 1, 2019
Erratum: less viscous than bitumen.
wildtalents says Feb, 1, 2019
Is it no longer considered a courtesy to the reader to spell out, and who knows maybe even explain, the abbreviations one uses?
Jen says Feb, 1, 2019
EROEI = Energy Returned on Energy Invested (also known as EROI = Energy Return on Investment)

EROEI refers to the amount of usable energy that can be extracted from a resource compared to the amount of energy (usually considered to come from the same resource) used to extract it. It's calculated by dividing the amount of energy obtained from a source by the amount of energy needed to get it out.

An EROEI of 1:1 means that the amount of usable energy that a resource generates is the same as the amount of energy that went into getting it out. A resource with an EROEI of 1:1 or anything less isn't considered a viable resource if it delivers the same or less energy than what was invested in it. A viable resource is one with an EROEI of at least 3:1.

https://en.wikipedia.org/wiki/Energy_returned_on_energy_invested

The concept of EROEI assumes that the energy needed to get more energy out of a resource is the same as the extracted energy ie you need oil to extract oil or you need electricity to extract electricity. In real life, you often need another source of energy to extract energy eg in some countries, to extract electricity, you need to burn coal, and in other countries, to extract electricity you need to build dams on rivers. So comparing the EROEI of electricity extraction across different countries will be difficult because you have to consider how and where they're generating electricity and factor in the opportunity costs involved (that is, what the coal or the water or other energy source -- like solar or wind energy -- could have been used for instead of electricity generation).

That is probably why EROEI is used mainly in the context of oil or natural gas extraction.

BigB says Feb, 1, 2019
wildtalents: Yes, I normally do. But the thread started from, and includes Crank's link that explains it.
Thomas Peterson says Feb, 1, 2019
That's true, Venezuela's 'oil' is mostly not oil.

[Feb 07, 2019] Saudi Arabia cuts oil output by about 400,000 bpd in January sources

Feb 07, 2019 | finance.yahoo.com

DUBAI/LONDON (Reuters) - Saudi Arabia, the world's top oil exporter, cut its crude output in January by about 400,000 barrels per day (bpd), two OPEC sources said, as the kingdom follows through on its pledge to reduce production to prevent a supply glut.

Riyadh told OPEC that the kingdom pumped 10.24 million bpd in January, the sources said. That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper than targeted under the OPEC-led pact to balance the market and support prices.

The Organisation of the Petroleum Exporting Countries, Russia and other non-OPEC producers - an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from Jan. 1.

The agreement stipulated that Saudi Arabia should cut output to 10.311 million bpd, but energy minister Khalid al-Falih has said it will exceed the required reduction to demonstrate its commitment.

[Feb 07, 2019] OPEC's Oil Exports to U.S. Fall to Five-Year Low in January

Feb 07, 2019 | finance.yahoo.com

Crude shipments to the U.S. from OPEC and its partners fell to 1.41 million barrels a day in January, the lowest in five years, according to data from cargo-tracking and intelligence company Kpler. Shrinking Iraqi imports and deep output cuts by Saudi Arabia fueled the decline

[Feb 05, 2019] Venezuelan Oil Exports Plunge On 'Harsher' Sanctions

So Trump imposed sanction on the USA too. Of he hopes that Strategic petroleum reserve will compensate for shortages... If Venezuela color revolution develops into Libya scenario, which they could oil output can be suppressed for years to come. In other words Trump really has chances to became Republican Obama.
OilPrice.com

The Wall Street Journal reported oil storage is "filling up" in Venezuela because of a lack of buyers.

Related: Wood Mac: Venezuela's Oil Output To Fall Below 1 Million Bpd

Moreover, not only are the effects of the sanctions more far-reaching, but also more immediate than first thought. At first, the U.S. seemed to exempt shipments that were underway, outlining a sort of phased approach that would allow a handful of American refiners to gradually unwind their oil purchase from Venezuela. The phased approach, which was supposed to be extended into April, would help "to minimize any immediate disruptions," U.S. Secretary of Treasury Steven Mnuchin said in late January.

But that now does not appear to be what is unfolding. PDVSA has demanded upfront payment, likely because it fears not being paid at all or having the revenues steered to the opposition. Indeed, the U.S. effort to steer PDVSA and its revenues into the hands of the U.S.-backed opposition leader Juan Gauidó appears to be a decisive turning point.

Oil tankers linked to Chevron, Lukoil and Respsol are delayed, redirected or sitting offshore because of lack of payment. The WSJ says that several of those tankers had recently sent oil to Corpus Christi, Texas, but are now anchored off the coast of Maracaibo sitting idle. "This is an absolute disaster," Luis Hernández, a Venezuelan oil union leader, told the WSJ. "There's almost no way to move the oil."

Unable to sell any oil, Maduro's regime could quickly run out of cash. The result could be a humanitarian catastrophe, a merciless and destructive objective that the Trump administration seems to have in mind. The U.S. government is essentially betting that by driving the country into the ground, the military and the people will turn on Maduro. It could yet turn out that way, but it could also deepen the misery and exact an unspeakable toll on the Venezuelan population, the very people the Trump administration says it is trying to help.

In the meantime, oil exports are likely heading into a freefall. The WSJ says that labor problems, including "mass defections of workers" are accelerating declines. PDVSA could soon run out of refined fuel.

Officials with knowledge of the situation told the WSJ that Venezuela's oil production has likely already fallen well below 1 million barrels per day (mb/d), down more than 10 percent – at least – from December levels.

Related: OPEC's Oil Princes Are Fighting For Survival

Wood Mackenzie estimates that production probably stands a little bit higher at about 1.1 mb/d, but that it could soon fall to 900,000 bpd.

... ... ...

That would push up oil prices significantly. But the U.S. government has blown past the point of no return, leaving it with no other options except to escalate. That means that Venezuela is set to lose a lot more oil than analysts thought only two weeks ago .

[Feb 05, 2019] Interesting to note that a part of Trump's beat-down of the Venezuela little people is the ban on the 120,000 b/d of dilutent last week. That will completely shut down Venezuella exports

Will loss of Vezuellian oil exports to the USA be compensated from the USA strategic reserve? Who will compensate this oil? Canada ? Or Trump administration decoded that temporary rise of oil prices is OK in view of more strategic goal ?
Notable quotes:
"... As for Venezuela's over-reliance on oil exports to support its economy, this is the result of past government policies before Chavez came to power. The US treated Venezuela as a petrol station and pro-US governments in the country turned it into a petrol station. ..."
Feb 05, 2019 | www.moonofalabama.org

PavewayIV , Feb 3, 2019 8:33:23 PM | link

Bart Hansen@20 - Oil production costs are complex, secret and mostly lies. With that caveat, Venezuela was thought to have about $10 - $15 production costs on average. That includes their light and medium crude, and zero investment in repair of their distribution networks.

Well over half of Venezuela's reserves are Orinco extra-heavy, sour crude. Essentially tar sands, but buried 500m - 1500m deep that require solvent or steam extraction. So (guess) maybe $30-range/bbl for production. Those tar sand oils produced are so heavy that they need pre-processing and dilution before they can be refined or exported. Naphtha or other refined products are used as dilutent and cost maybe $55/bbl today, but were around $75/bbl last October.

U.S. refineries were pretty much the only ones paying cash for their 500,000 b/d of Venezuelan crude. Trump's sanctions not only ban those imports, but also ban the 120,000 b/d of naphtha and other dilutents we sold them.

Interesting to note that part of Trump's beat-down of the Venezuela little people is a ban on the 120,000 b/d of dilutent last week. That will completely shut down their exports. They could find another source of naphtha, but that source will be looking for $6.6 million a day hard cash for it.

Maduro needs to sell Venezuela's gold to buy naphtha to export oil for ANY revenue. The $2.5 billion the Bank of England can't find and won't deliver is meant to hasten the food riots and CIA-orchestrated coup. But Mercy Corps is setting up concentration camps on the Colombian border and we're delivering food aid, so the U.S. is really the hero, here. God bless America! Obey, or die.

Jen , Feb 3, 2019 7:21:08 PM | link
Red Ryder @ 30: Venezuela's economy is as much ruined by US economic sanctions against the country and (at US behest) Saudi Arabia's flooding of the global oil market that sent oil prices down in order to crash the economies of other countries like Iran and Russia that were presumed to be dependent on oil exports, as by mismanagement or poor leadership on Chavez or Maduro's part.

On top of that, major food importers and producers (several of which are owned by companies or individuals hostile to Chavez and Maduro) have been withholding food from supermarkets to manipulate prices and goad the public into demonstrating against the government.

As for Venezuela's over-reliance on oil exports to support its economy, this is the result of past government policies before Chavez came to power. The US treated Venezuela as a petrol station and pro-US governments in the country turned it into a petrol station.

Chavez did try to encourage local food production and carried out some land redistribution to achieve this. But his efforts did not succeed because importing food was cheaper than producing it locally and farm-workers apparently preferred jobs in the oil industry that paid better and were more secure.

I do not know how the collectives were organised, whether they had some independent decision-making abilities or not, or whether they were organised from top down rather than bottom up, so I can't say whether their organisational structures and the internal culture those encouraged worked against them.

[Feb 04, 2019] Citi expects Brent crude to continue rising into the mid-$60 range and hit $70 before year end

Feb 04, 2019 | finance.yahoo.com

The bank expects oil supply to tighten in the first quarter as top exporter Saudi Arabia cuts production , but Citi's Ed Morse also forecasts a soft spot for demand in the opening months of 2019. Further complicating matters are a series of geopolitical and market dramas that will play out through the beginning of May.

This follows a three-month period that saw oil prices spike to nearly four-year highs as the market braced for U.S. sanctions on Iran. Prices then tumbled more then 40 percent to 18-month lows, blowing up long-held trading strategies and forcing drillers to rethink their 2019 budgets.

"The volatility every year is a good $20 to $25 a barrel between low and high," Morse said. "December was kind of the nightmare for the world where the swings were $50 at a low, $86 at a high and $68 for the average of Brent."

... ... ...

Citi expects Brent crude to continue rising into the mid-$60 range and hit $70 before year end. That will be enough to keep in play another wild card: surging U.S. oil production.

[Feb 04, 2019] The REAL Reason The U.S. Wants Regime Change in Venezuela.

Feb 04, 2019 | www.unz.com

Agent76 , says: February 3, 2019 at 7:29 pm GMT

Feb 2, 2019 The REAL Reason The U.S. Wants Regime Change in Venezuela. The U.S. and its allies have decided to throw their weight behind yet another coup attempt in Venezuela. As usual, they claim that their objectives are democracy and freedom. Nothing could be farther from the truth.

Feb 3, 2019 Venezuela's Oil Enough for World's 30 Year Energy Needs

The long bankrupt fiat financial system is pushing the Deep State to target Venezuela for the latter's natural resources that dwarfs that of its satellite province Saudi Arabia.

https://geopolitics.co/2019/02/03/venezuelas-oil-enough-for-worlds-30-year-energy-needs/

[Feb 04, 2019] Did Trump administration sold part of the US stratagic reserve to bring oil prices down?

Feb 04, 2019 | www.unz.com

renfro , says: January 30, 2019 at 11:59 pm GMT

Well people you need to explore this move to take over Venezuela in the context of what having that oil control will mean for the US and Israel in the increasingly likely event we blow up Iran and up end the ME for Israel.

Despite Trump selling off half of our US oil reserves last year .. https://www.reuters.com/article/us-usa-oil-reserve/u-s-sells-11-million-barrels-of-oil-from-reserve-to-exxon-five-other-firms-idUSKCN1LG2WT ..the US doesn't currently, at present anyway, need to control Venezuela's oil .

So what could happen that might make control of oil rich Venezuela necessary? Why has Venezuela become a Bolton and Abrams project? Why is Netanyahu putting himself into the Venezuela crisis ?

We, otoh, would need all the oil we could get if we blew up the ME, specifically Iran, figuratively or literally. The US signed a MOU with Israel in 1973 obligating us to supply Israel with oil ( and ship it to them) if they couldn't secure any for themselves.

[Feb 04, 2019] Production is likely to head south in 2019

Notable quotes:
"... Production is likely to head south, so nobody will get it. Perfect storm. Iran sanctions, Saudis are going to cut to 10.1 instead of 10.3, Venezuela production to plummet, and US oil is on a hiatus. What a glut. ..."
Feb 04, 2019 | peakoilbarrel.com

Guym x Ignored says: 01/29/2019 at 4:38 pm

https://www.cnbc.com/amp/2019/01/28/-venezuela-crisis-oils-ticking-time-bomb-to-detonate-analysts-say.html

Production is likely to head south, so nobody will get it. Perfect storm. Iran sanctions, Saudis are going to cut to 10.1 instead of 10.3, Venezuela production to plummet, and US oil is on a hiatus. What a glut.

[Feb 04, 2019] Global outages boost oil prices

Feb 04, 2019 | www.rt.com

Oil prices are on track for strong gains this week, and the price increases are not only the result of the crisis in Venezuela. The oil market received a boost from the US Federal Reserve this week, which signaled on Wednesday that it would essentially suspend its plans to hike interest rates this year. Fed chairman Jerome Powell said that economic growth remained "solid" but that the central bank had "the luxury of patience" when deciding on further rate hikes. That is a big change from prior guidance, in which the Fed very clearly outlined multiple rate increases in 2019.

"The case for raising rates has weakened somewhat," Powell said. Slowing growth in China and Europe, a weakening housing market, tepid inflation – these are not exactly the ingredients that call for aggressive rate tightening.

Read more Saudi Arabia: We'll pump the world's very last barrel of oil Saudi Arabia: We'll pump the world's very last barrel of oil

The announcement contributed to strong gains for oil prices on Wednesday and Thursday. At the time of this writing, WTI was trading in the mid-$50s, with Brent above $62 per barrel, both close to two-month highs.

READ MORE: Russia vows to defend its Venezuelan oil assets

A more dovish position from the Fed boosts the bullish case for oil in two ways. First, lower-than-expected interest rates will provide a jolt to the economy. Stock markets rose on the news. But second, a softer rate outlook also undercuts the US dollar a bit. A weaker dollar stokes crude oil demand in the rest of the world, and historically the dollar has had an inverse relationship with oil prices.

Meanwhile, the oil market received a more direct boost this week on news that Saudi Arabia slashed shipments to the United States. The US has the most transparent and up-to-date data on the oil market, which include weekly releases on production levels, imports and exports, and inventories. That kind of visibility is not readily available in most places around the world.

As a result, Saudi Arabia appears to be deliberately targeting that data. By reducing shipments to the US specifically, Riyadh can help create the appearance of a tightening oil market. Saudi shipments to the US dropped by 528,000 bpd last week to just 442,000 bpd, the lowest weekly total in more than two years.

Also on rt.com Oil markets could see deficit in 2019

More to the point, OPEC's production declined by 890,000 bpd in January, according to a Reuters survey, the largest monthly decline since early 2017 (the month that the first round of OPEC+ production cuts took effect). Iraq produced above its production ceiling, but aside from that, the cartel is well on its way to implementing the production curbs.

In fact, there is suddenly a remarkable confluence of events pushing oil in a bullish direction. First and foremost are the OPEC+ production cuts of 1.2 mb/d that are phasing in. But beyond that, US shale is starting to slowdown, and while output is still expected to grow this year, the increase could be the smallest in years.

Read more Iran announces oil discovery in untapped region Iran announces oil discovery in untapped region

Then there are the supply outages. Libya lost some output unexpectedly in December, with some of its production still offline. Iran sanctions waivers are set to expire in May, and the US hopes to further cut into Iranian oil exports. The new sanctions on Venezuela threaten to create yet another major source of supply outages.

In fact, when considering that OPEC+ is determined to keep 1.2 mb/d of supply off of the market, and painful US sanctions on Venezuela and Iran threaten to shut in even more output, it's pretty amazing that Brent crude is only trading at $62 per barrel. The Fed backing off interest rate hikes is the cherry on top.

Traders and investors are starting to wake up to this bullish sentiment. "The market is more convinced that there will be aggressive production cuts and the macro picture has improved a bit. That's positive for prices going forward," Jean-Louis Le Mee, CEO of London-based oil hedge fund Westbeck Capital, told the Wall Street Journal.

Another investor echoed that sentiment in comments to the WSJ. "The Saudis are sincere about higher oil prices, they need to balance their budget. The OPEC cuts will lower stocks so I'm pretty bullish," said Mark Gordon, portfolio manager at the Ascent Oil Fund.

Oil prices are back up to where they were in November, and significant outages from Venezuela in the short run could pave the way for more price increases.

[Feb 04, 2019] What if this is the beginning of the Senneca-Cliff?

Feb 04, 2019 | peakoilbarrel.com

Karl Johnson

x Ignored says: 01/29/2019 at 10:11 am
Whats the beginning of the Senneca-Cliff?
GuyM x Ignored says: 01/29/2019 at 11:50 am
I think it would be this year, if not last year. Ron has said 2019 at one time. Dennis thinks later, around 2025, as I recall.
Hickory x Ignored says: 01/29/2019 at 2:14 pm
Karl- I see that you asked 'what' rather than when.
Seneca Cliff refers to a very rapid decline in a feature (such as global oil production) after it has achieved a peak. This is as opposed to a very slow decline.
Obviously for oil, a fast decline would be catastrophic.

https://cassandralegacy.blogspot.com/2011/08/seneca-effect-origins-of-collapse.html

Guym x Ignored says: 01/29/2019 at 4:00 pm
According to the chart from iRA I posted below, we would be on a Seneca cliff now, without shale oil. Just flattened the drop for awhile.
GuyM x Ignored says: 01/29/2019 at 11:39 am
https://www.iea.org/newsroom/news/2018/november/crunching-the-numbers-are-we-heading-for-an-oil-supply-shock.html

US production will be close to flat 2019, and if ports are not improved much until late 2020, then 2020 will not be great. After that, I don't see it catching up.

Han Neumann x Ignored says: 01/31/2019 at 10:58 pm
As stated many times on 'theoildrum', State of the art EOR projects deplete oilfields, who without EOR would go in terminal decline much earlier, very rapidly. So a world oilproduction cliff cannot be ruled out, especially if money reserves from oil companies dry up.
Dennis Coyne x Ignored says: 02/01/2019 at 10:32 am
Han Neumann,

Oil prices are likely to rise if there is a shortage of oil, this will mean oil companies will have plenty of financial resources as long as demand is sufficient to consume the oil produced. Not suggesting there will not be a decline, just unlikely there will be a cliff unless oil prices drop, so far there is no evidence of a cliff and given World stock level trend, prices are unlikely to drop further and are more likely to increase in the future.

Han Neumann x Ignored says: 02/03/2019 at 1:33 pm
Dennis,

A cliff is unlikely to happen, I agree.

But to repeat a cliché: depletion never sleeps. Already about fifteen years ago EOR projects were started that extracted oil from (quite) 'past peak' or 'on plateau production' oilfields. EOR projects in case of 'quite past peak' fields, to get 'the last recoverable' barrel out resulting in oil production/day far less than peak production.

I know, the recoverable quantity increases with rising oilprices and better extraction techniques, but still the production/day way past peak will be much less than on peak.

What will happen when oilprices don't increase a lot for the next ten years, for a combination of reasons ?

At a certain point in time all the money in the world couldn't prevent world production decline and the further that point will be in the future, the steeper will be the decline I think. So better sooner than later oilprices begin to increase significantly, to buy some time for the transition to EV's, etc.

I am not an expert in engineering nor in geology, far from that, just expressing a feeling that I got after having read the many posts on theoildrum regarding this matter.

https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#4691a69d44cf

[Feb 03, 2019] Venezuellla as a patch to ailing US frakers

Notable quotes:
"... US need for heavy oil is also due to declines in conventional oil production. Fracking "oil" ( high in condensates) has been used to mask the peak (real) oil declines and also has a lower energy content/barrel and must be blended with heavy oil for the refineries to process it. Thus, "Prices of heavier U.S. grades like Mars Sour, an offshore medium U.S. crude, and Heavy Louisiana Sweet crude have risen as buyers scramble for supply". ..."
"... Mars currently trades at a premium to U.S. crude at $58.19 vs $53.69 for West Texas Intermediate (WTI)". Currently, the US also imports 500,000 barrels of Venezuelan crude a day to meet refinery blending requirements. ..."
"... All other shale fracking regions than the Permian have peaked or are in decline as shown by http://aheadoftheherd.com/Newsletter/2018/Shale-is-dead-long-live-conventional-oil.pdf ..."
Feb 03, 2019 | www.moonofalabama.org

Krollchem , Feb 2, 2019 7:24:19 PM | link

Update on comment Krollchem@176

This article by Nafeez Ahmed connects the dots that have led to the Venezuela's current political and economic crisis. The factors include:
(1) predatory global capitalism (see Michael Hudson's work);
(2) government mismanagement e.g. price controls;
(3) corruption at all levels (insiders);
(4) droughts (El-Nino), especially in 2015 and tied to lower hydroelectric electricity production;
(5) oil price flux;
(6) US destabilization efforts;
(7) privatization of oil resources;
(8) low Energy Return on (energy) Invested (EROI);
(9) US use of (corporate socialism) subsidized oil prices as a weapon to punish real oil producers
https://oilprice.com/Energy/Energy-General/Warning-Signs-Flash-For-US-Shale.html
(10) Energy waste by gas flaring, which is also common in the US.
https://medium.com/insurge-intelligence/venezuelas-collapse-is-a-window-into-how-the-oil-age-will-unravel-f80aadff7786
https://www.texastribune.org/2019/01/24/report-oil-producers-flaring-more-natural-gas-texas-reported/

He neglects other factors such as:
(1) poor soil management practices;
(2) demographics such as some 3 million Columbian citizens fleeing the Fascist Columbian military attacks and putting extra stress on the social programs;
(3) Increasing US needs for Venezuela heavy crude to blend with the light fractions coming from fracking operations (e.g. Eagle Ford light "oil" condensates;
(4) US military need for War to support funding levels (e.g. Smidley Butler's "war is a racket";
(5) batshit crazy neocon and neoliberal ideology and world domination.

The EROI issue is worse that many consider. See Gail Tverberg article "How the Peak Oil Story Could Be "Close," But Not Quite Right". The article points out that wellhead costs do not capture the downstream costs of production and tax capture that bust further reduce the EROI.
https://www.nakedcapitalism.com/2019/01/peak-oil-story-close-not-quite-right.html

US need for heavy oil is also due to declines in conventional oil production. Fracking "oil" ( high in condensates) has been used to mask the peak (real) oil declines and also has a lower energy content/barrel and must be blended with heavy oil for the refineries to process it. Thus, "Prices of heavier U.S. grades like Mars Sour, an offshore medium U.S. crude, and Heavy Louisiana Sweet crude have risen as buyers scramble for supply".

Mars currently trades at a premium to U.S. crude at $58.19 vs $53.69 for West Texas Intermediate (WTI)". Currently, the US also imports 500,000 barrels of Venezuelan crude a day to meet refinery blending requirements.
https://uk.reuters.com/article/uk-venezuela-politics-usa-oil/venezuelan-oil-exports-to-u-s-still-a-primary-source-of-cash-idUKKCN1PJ2D1
https://www.bloomberg.com/news/articles/2018-10-17/permian-drillers-are-said-to-sell-new-lighter-crude-oil-grade
https://btuanalytics.com/quality-matters-api-gravities-of-major-us-fields/
https://oilprice.com/Energy/Energy-General/Gasoline-Overproduction-Leads-To-Negative-Margins.html

All other shale fracking regions than the Permian have peaked or are in decline as shown by http://aheadoftheherd.com/Newsletter/2018/Shale-is-dead-long-live-conventional-oil.pdf

Added to this EROI problem is that the new US energy production hope from the Permian basin is beset with water shortages. https://oilprice.com/Energy/Energy-General/Is-The-Permian-Bull-Run-Coming-To-An-End.html

The economics of the US fracking light oil condensates industry is much worse when you consider the offloading of pollution costs (drinking water), health effects, wear and tear of highways from trucking the oil, water and fracking sands (one pound/barrel), climate change from massive methane flaring, volatile organic compounds (VOC) release and earthquake damage from deep injection of the water cut fluids.

[Feb 02, 2019] The Great Oil Paradox Too Many Good Crudes, Not Enough Bad Ones by Javier Blas

This is pretty nasty propaganda, completely detached from reality. Shale oil and condensate are less valuable for refineries and have lower energy content. That's why they are undesirable and refineries in the USA prefer heavy oil, which has a right mixture of hydrocarbons to produce diesel and aviation fuel along with gas,
Feb 02, 2019 | www.bloomberg.com

Texas and other shale-rich states are spewing a gusher of high-quality crude -- light-sweet in the industry parlance -- feeding a growing glut that's bending the global oil industry out of shape.

Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for OPEC producers like Iraq and Saudi Arabia, who don't produce much light-sweet, but pump plenty of the dirtier stuff.

The crisis is Venezuela, together with OPEC output cuts, will exacerbate the mismatch. The South American producer exports some of the world's heaviest oil and Trump administration sanctions announced this week will make processing and exporting crude far more difficult. American refiners are scrambling for alternative supplies at very short notice.

"We still have some holes in our supply plan" over the next 30 days, Gary Simmons, a senior executive at Valero Energy Corp., the largest refiner in the U.S., told investors on Thursday. "We are not taking anything from Venezuela."

Crude isn't the same everywhere: the kind pumped from the shale wells of West Texas resembles cooking oil -- thin and easy to refine. In Venezuela's Orinoco region, it looks more like marmalade, thick and hard to process. Density isn't the only difference -- the sulfur content is also important, dividing the market into sweet and sour crude. Heavy crude tends to have more sulfur than light crude.

As Saudi Arabia, Russia and Canada cut production, and American sanctions force Venezuelan and Iranian exports lower, the market for low-quality crude is feeling the impact.

"The strength in the physical crude market continues, led by sour crude shortages," Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London, said echoing a widely held view within the market

[Jan 31, 2019] Venezuela color revolution plot thickens

Notable quotes:
"... UN should be probing Washington and allies for regime-change crimes Identical condemnations from the US and allies and the synchronicity show that Venezuela is being targeted for regime change in a concerted plot led by Washington. ..."
"... It is so disappointing that Americans yet to come to realization that this criminal Jewish Mafia does not standing at the end of the old republic. He is DEEPLY involved, but his STYLE is different. He kills and terrorize the same as Regan, Carter, Clinton, Bush, Obama who have killed millions of people. His sanction is the KILLING MACHINE to topple governments TO STEAL THEIR RESOURCES FOR THE DUMMIES. I have NO respect for the liars who are trying to paint a criminal as someone 'standing against' the deep state. TRUMP IS PART OF THE DEEP STATE, ONLY DUMMIES DO NOT GET IT. ..."
"... No matter the situation in Venezuela, whatever the US government and media are saying is just hostile propaganda as they couldn't give a rat's ass about the people living there. The Libyan people were doing well out of their oil, as were the Iraqis, living in reasonable wealth and security, and look at them now after the US decided to meddle in their affairs. Now after all that, even if something the US government says may be true, why believe it? How many times do you need to be fooled to stop being a fool? ..."
"... The nuttiest member of the Trump administration is UN Ambassador Nikki Haley. Her latest neo-nazi stunt was to join protestors last week calling for the overthrow of the democratically elected government of Venezuela. She grabbed a megaphone at a tiny New York rally and told the few "protesters" (organized by our CIA) to say the USA is working to overthrow their President. This was so bizarre that our corporate media refused to report it. ..."
"... Why does everyone make Trump out to be a victim, poor ol Trump, he's being screwed by all those people he himself appointed, poor ol persecuted Trump. Sounds like our Jewish friends with all the victimization BS. ..."
"... By now Trump must be near bat shit crazy. Imagine hundreds of vampires descending on every exposed artery and vein. Does he have a chance in 2020? Not with the people who are around him today ..."
"... Regardless of what the MSM reports, the population is fed-up with all the malarkey, and the same old faces. ..."
"... If he can he should issue an executive order allowing important items like immigration to go directly to public referendum, by passing congress. We're tired of idiots with personal grudges holding our President hostage. Stern times calls for sterner measures. ..."
"... Juan Guaidó is the product of a decade-long project overseen by Washington's elite regime change trainers. While posing as a champion of democracy, he has spent years at the forefront of a violent campaign of destabilization. ..."
Jan 28, 2019 | www.unz.com

Agent76 says: January 30, 2019 at 7:21 pm GMT 100 Words Jan 24, 2019 Catastrophic Consequences What's Really Happening in Venezuela

In this video, we give you the latest breaking news on the current situation in Venezuela with Maduro, the election, and Trump's response.

UN should be probing Washington and allies for regime-change crimes Identical condemnations from the US and allies and the synchronicity show that Venezuela is being targeted for regime change in a concerted plot led by Washington.

http://www.informationclearinghouse.info/50989.htm


AnonFromTN , says: January 30, 2019 at 7:58 pm GMT

@Sergey Krieger Negotiations are not necessarily a sign of weakness. However, Maduro should negotiate with the puppet masters, not with the puppet. I don't think that killing that pathetic Guaido is a good strategy: you don't want to make a martyr out of nonentity.
WorkingClass , says: January 30, 2019 at 8:02 pm GMT
And, in effect, I wish for the success of Juan Guaido in his struggle with Maduro, and I support American diplomatic and economic pressure on Maduro to step down. After all, Venezuela is in our back yard with huge oil reserves.

FUCK YOU! Venezuela is not "our" back yard. And the oil does not belong to "us".

anonymous [204] Disclaimer , says: January 30, 2019 at 8:31 pm GMT
[Donald Trump, for all that and for his various faults and miscues, is in reality the only thing standing in the way of the end of the old republic. ]

It is so disappointing that Americans yet to come to realization that this criminal Jewish Mafia does not standing at the end of the old republic. He is DEEPLY involved, but his STYLE is different. He kills and terrorize the same as Regan, Carter, Clinton, Bush, Obama who have killed millions of people. His sanction is the KILLING MACHINE to topple governments TO STEAL THEIR RESOURCES FOR THE DUMMIES. I have NO respect for the liars who are trying to paint a criminal as someone 'standing against' the deep state. TRUMP IS PART OF THE DEEP STATE, ONLY DUMMIES DO NOT GET IT.

The ignorant Jewish mafia 'president' IS MORE DANGEROUS because he like his 'advisors' is totally ILLITERATE. It is a family business dummies.

Are dummies going to hold petty people like Bolton who lie to get money from MEK to buy a new suit and new shoes, is responsible for the policy of the Trump regime where he wages WARS, economic sanction, to starve children to surrender? Then NO ONE Trusts you. MEK people are not more than 20, but are funded by the US colony, Saudi Arabia where MBS transfers money to the Jewish mafia family funding US wars.

Maduro has EVERY SINGLE RIGHT to arrest Juan Guiado, a gigolo who is taking orders from a US and an illiterate 'president', where its dark history known to every living creature on earth. US has massacred millions of people in all continents including Latin America.

Maduro has every single right to arrest him and put on trail and execute him as a traitor and an enemy of the state. How many years the people in Venezuela should suffer for the US 'regime change' and its crimes against humanity in Venezuela to STEAL ITS RESOURCES.

onebornfree , says: Website January 30, 2019 at 9:15 pm GMT
"So let me get this straight: The Russians brought America to its knees with a few facebook ads, but Uncle Sam's concerted and ongoing efforts to overthrow governments around the world and interfere with elections is perfectly fine? Because democracy? Riiiiiiight." :

https://www.corbettreport.com/election-interference-is-ok-when-uncle-sam-does-it-propagandawatch/

Regards, onebornfree

anonymous [204] Disclaimer , says: January 30, 2019 at 9:34 pm GMT
[The last Venezuelan Presidential election was a joke. ]

YOU ARE A JOKE ZIONIST IDIOT.

The Making of Juan Guaidó: How the US Regime Change Laboratory Created Venezuela's Coup Leader

[Juan Guaidó is the product of a decade-long project overseen by Washington's elite regime change trainers. While posing as a champion of democracy, he has spent years at the forefront of a violent campaign of destabilization.]

https://www.globalresearch.ca/the-making-of-juan-guaido-how-the-us-regime-change-laboratory-created-venezuelas-coup-leader/5666971

Illiterate Jewish Mafia 'president' must be kicked out of the office. Hands of Israel is all over the SELECTION.

The ignorant 'president' is MORE DANGEROUS THANT OTHER CRIMINAL US REGIMES because on top of being a criminal, he is ILLITERATE as well.

[In 2009, the Generation 2007 youth activists staged their most provocative demonstration yet, dropping their pants on public roads and aping the outrageous guerrilla theater tactics outlined by Gene Sharp in his regime change manuals.This far-right group "gathered funds from a variety of US government sources, which allowed it to gain notoriety quickly as the hardline wing of opposition street movements," according to academic George Ciccariello-Maher's book, "Building the Commune."

That year, Guaidó exposed himself to the public in another way, founding a political party to capture the anti-Chavez energy his Generation 2007 had cultivated.]

Guaido's behind towards washington criminal elite

map , says: January 30, 2019 at 9:36 pm GMT
@By-tor See, this is the typical lie. Socialism fails, so the socialist blames the outside wrecker for causing the problem. If Moscow freezes, then it is because of the wreckers. If Moscow starves, then it is because of the wreckers.

If Venezuela collapses, then it is because of "sanctions," not the failure of the new socialist economy.

America has the right to lock anyone out of its economy that it wants, for whatever reasons. This should not matter because that nation can still trade with the rest of the world, like China. Venezuela could get everything it wants by simply selling oil to China in exchange for goods. The problem is, there is not enough oil production to do so and other nations are reluctant to replace American investment for fear of losing their assets as well.

Think about how wrong-headed the Chavez policy has been. If the Venezuelans have problems with their local ruling class and want to get rid of them fine do so. But, why go after the American oil company? The Americans don't care who rules Venezuela as long as their contracts are honored. Chavez could have then been a true socialist an allocate a greater dividend to Venezuelans that was previously being hoarded by the ruling class an arrangement similar to what Alaskans have with American oil companies.

But no there was an immediate seizure of assets because the only purpose of socialism is to make the socialist leaders rich. And Chavez and Maduro became very rich indeed.

Hibernian , says: January 30, 2019 at 9:48 pm GMT
@WorkingClass No other nation is in our back yard. They are near neighbors.
Sergey Krieger , says: January 30, 2019 at 10:02 pm GMT
@AnonFromTN I would happily martyr gorbachov , Yeltsin and all their gang. I think everybody would have been far better of then. Same is applied to the puppet. Nikolai II was martyred and things got a lot better. What is important is winning and final outcome, while making some martyrs in the process.
RVBlake , says: January 30, 2019 at 10:11 pm GMT
@Harold Smith Trump's personnel picks are mind-boggling. I cannot see how he disapproves Eliot Abrams for deputy SoS with one breath, then blandly allows Pompeo to appoint him an envoy to a trouble-spot. Bolton, Pompeo, Goldberg et al.
El Dato , says: January 30, 2019 at 10:11 pm GMT
@Sean

NEOCON America does not want Russian bombers in South America.

Real America doesn't give a f*ck. Bombers are so last century, might as well put up machine-gun equipped Union Pacific Big Boys to make it marginally more steampunk and become a real danger for the USA.

EliteCommInc. , says: January 30, 2019 at 10:33 pm GMT
@Tyrion 2 There is not a single complaint here that did not exist before the election or before Pres Chavez.

There are poor management leaders all over the globe. That';s their business. Hey we have some right here in the US I take it your solution is a military coup or better yet a coup fostered by the EU or the OAS, or maybe ASEAN or SDG . . .

jack daniels , says: January 30, 2019 at 10:40 pm GMT
It would be nice if someone simply asked Trump why it is he originally wanted to get along with Russia and pull out of the middle east and generally opposed the "neoconservative" approach and now seems to be hiring neocons and doing what they want. Is he trying to placate Sheldon Adelson and Adelson's lackeys, or what? I don't know of his being asked about this directly.
APilgrim , says: January 30, 2019 at 10:49 pm GMT
Is President Nicolas Maduro stealing the strategic gold reserves of Venezuela?

'Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown', Patricia Laya and Andrew Rosati, Bloomberg, January 30, 2019, https://finance.yahoo.com/news/venezuela-20-tons-gold-ready-004013962.html

Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country's central bank. Guerra is a former central bank economist who remains in touch with old colleagues there. A person with direct knowledge of the matter told Bloomberg News Tuesday that 20 tons of gold have been set aside in the central bank for loading. Worth some $840 million, the gold represents about 20 percent of its holdings of the metal in Venezuela.

Commentator Mike , says: January 30, 2019 at 11:01 pm GMT
@map

No matter the situation in Venezuela, whatever the US government and media are saying is just hostile propaganda as they couldn't give a rat's ass about the people living there. The Libyan people were doing well out of their oil, as were the Iraqis, living in reasonable wealth and security, and look at them now after the US decided to meddle in their affairs. Now after all that, even if something the US government says may be true, why believe it? How many times do you need to be fooled to stop being a fool?

Tyrion 2 , says: January 30, 2019 at 11:02 pm GMT
@EliteCommInc.

No, Chavez had popular legitimacy. Maduro has nothing but force to keep himself in power now. Yes, there's easy definition for the above but Chavismo is decrepit.

Pressure for a reasonable Presidential election is based on that.

peterAUS , says: January 30, 2019 at 11:12 pm GMT
@RVBlake

A guy on ZH explained it well, I guess:

  1. The opposition hates me. I can do no right.
  2. The Trumptards blindly support me. I can do no wrong.
  3. There are not enough independent thinkers to make a difference as the two main sides bitterly fight each other over every minute, meaningless issue.
  4. I can pretty much do as I please without consequence ..like pay off all my buddies and pander to the jews/globalist/elites.
    I'd add: and by doing the last, I could cut a deal with the real TPTBs as to for what happens after I leave White House.
Hibernian , says: January 30, 2019 at 11:21 pm GMT
@Tyrion 2

Chavez had popular support . He felt the need to intimidate opponents from the beginning. Like Bill Bellicheck and Tom Brady feeling the need to cheat.

Pft , says: January 30, 2019 at 11:32 pm GMT
@APilgrim

Makes sense. They owe a big chunk of money to Russia and a payment of 100 million is coming due. Russia gets security for future payments while it holds their gold in a safe place. They may ship the rest to China if they are smart

renfro , says: January 30, 2019 at 11:41 pm GMT
@Carlton Meyer

The nuttiest member of the Trump administration is UN Ambassador Nikki Haley. Her latest neo-nazi stunt was to join protestors last week calling for the overthrow of the democratically elected government of Venezuela. She grabbed a megaphone at a tiny New York rally and told the few "protesters" (organized by our CIA) to say the USA is working to overthrow their President. This was so bizarre that our corporate media refused to report it.

She's being paid no doubt by the usual suspects. She is personally 1 million in debt and has signed with a Speakers agency to give speeches for 200,000 a pop.

COLUMBIA, S.C. (WCIV)

"Haley is currently quoting $200,000 and the use of a private jet for domestic speaking engagements, according to CNBC
In October 2018, when Haley resigned, she said, she would be taking a "step up" into the private sector after leaving the U.N. According to a public financial disclosure report based on 2017 data, at the rate quoted for her engagements, just a handful would pay down more than $1 million in outstanding debt that was accrued during her 14 years

renfro , says: January 30, 2019 at 11:43 pm GMT
@peterAUS

3. There are not enough independent thinkers to make a difference as the two main sides bitterly fight each other over every minute, meaningless issue.

Well that is true.

renfro , says: January 30, 2019 at 11:59 pm GMT
Well people you need to explore this move to take over Venezuela in the context of what having that oil control will mean for the US and Israel in the increasingly likely event we blow up Iran and up end the ME for Israel.

Despite Trump selling off half of our US oil reserves last year .. https://www.reuters.com/article/us-usa-oil-reserve/u-s-sells-11-million-barrels-of-oil-from-reserve-to-exxon-five-other-firms-idUSKCN1LG2WT ..the US doesn't currently, at present anyway, need to control Venezuela's oil .

So what could happen that might make control of oil rich Venezuela necessary? Why has Venezuela become a Bolton and Abrams project? Why is Netanyahu putting himself into the Venezuela crisis ?

We, otoh, would need all the oil we could get if we blew up the ME, specifically Iran, figuratively or literally. The US signed a MOU with Israel in 1973 obligating us to supply Israel with oil ( and ship it to them) if they couldn't secure any for themselves.

Z-man , says: January 31, 2019 at 12:11 am GMT
@Hibernian I hate those two guys so much, and the owner Kraft also. I'm hoping for a helmet to helmet collision for Brady early in the second quarter with his bell ringing for the rest of the game. (Evil grin)
Z-man , says: January 31, 2019 at 12:14 am GMT
@renfro I have nothing but ill will for that mutt Haley.
By-tor , says: January 31, 2019 at 12:41 am GMT
@Tyrion 2 Yes, the int'l monitors said the elections were fair as Maduro received over 60% of the vote. You think the 'deplorables' of venezuela elected the known US-Wall Street neo-liberal puppet Guaido? No, the US Tape Worm groomed this twerp, all-the-while his backers and paymasters in the American neo-Liberal ruling class claim Russian meddling in the 2016 US elections. The shamelessness and hypocrisy is astounding.
EliteCommInc. , says: January 31, 2019 at 12:47 am GMT
@Tyrion 2 Pres Hugo Chavez's admin was very controversial. And the conditions you speak of have plagued Venezuela even before Pres Chavez came to government.

This really is none of our affair. We don't have a mandate to go about the planet tossing out whoever we think is crazy. He is not a threat to the US. There's no indication that he intends to harm US businesses.

Their polity means their polity. You'll have to do better than he's crazy, mean, a despot, etc. That's for them to resolve.

Johnny Walker Read , says: January 31, 2019 at 12:50 am GMT
@Commentator Mike Seems some will never learn the definition of insanity, especially the NeoCons who have been running America for far too long. I recommend John Perkins "Confessions of an Economic Hit Man" for the less informed among us here today. Maybe at some point they will get a clue.
redmudhooch , says: January 31, 2019 at 1:30 am GMT

I heartily dislike and find despicable the socialist government of Maduro, just as I did Hugo Chavez when he was in power. I have some good friends there, one of whom was a student of mine when I taught in Argentina many years ago, and he and his family resolutely oppose Maduro. Those socialist leaders in Caracas are tin-pot dictator wannabees who have wrecked the economy of that once wealthy country; and they have ridden roughshod over the constitutional rights of the citizens. My hope has been that the people of Venezuela, perhaps supported by elements in the army, would take action to rid the country of those tyrants.

Hard to take this guy seriously when he spouts Fox News level propaganda.

Why does everyone make Trump out to be a victim, poor ol Trump, he's being screwed by all those people he himself appointed, poor ol persecuted Trump. Sounds like our Jewish friends with all the victimization BS.

Its clear that voting no longer works folks, this is an undemocratic and illegitimate "government" we have here. We let them get away with killing JFK, RFK, MLK, Vietnam, we let them get away with 9/11, Iraq, Libya, Afghanistan, Syria. They've made a mess in Africa. All the refugees into Europe, all the refugees from Latin America that have already come from CIA crimes, more will come.
We wouldn't need a wall if Wall St would stop with their BS down there!

You can't just blame Jews, yes there are lots of Jews in Corporate America, bu t not all of them are, and there are lots of Jews who speak out against this. We were doing this long before Israel came into existence. You can't just blame everything one one group, I think Israel/Zionist are responsible for a lot of BS, but you can't exclude CIA, Wall St, Corporations, Banks, The MIC either. Its not just one group, its all of them. They're all evil, they're imperialists and they're all capitalists. I think Israel is just a capitalist creation, nothing to do with Jews, just a foothold in he middle east for Wall St to have a base to control the oil and gas there, they didn't create Israel until they dicovered how much oil was there, and realized how much control over the world it would give them to control it. Those people moving to Israel are being played, just like the "Christian Zionists" here are, its a cult. Most "Jews" are atheists anyhow, and it seems any ol greedy white guy can claim to be a Jew. So how do you solve a "Jewish Problem" if anybody can claim to be a Jew? I think solving the capitalist problem would be a little easier to enforce.

All of the shills can scream about communists, socialists and marxists all they want. Capitalism is the problem always has been always will be. Its a murderous, immoral, unsustainable system that encourages greed, it is a system who's driving force is maximizing profits, and as such the State controlled or aligned with Corporations is the most advanced form of capitalism because it is the most profitable. They're raping the shit out of us, taking our money to fund their wars, so they can make more money while paying little to no taxes at all. Everything, everyone here complains about is caused by CAPITALISM, but nobody dares say it, they've been programmed since birth to think that way.

We should nationalize our oil and gas, instead of letting foreigners come in and steal it, again paying little or no taxes on it, then selling the oil they took from our country back to us. Russia and Venezuela do it, Libya did it, Iraq did it, and they used the money for the people of the country, they didn't let the capitalists plunder their wealth like the traitors running our country. We're AT LEAST $21 trillion in the hole now from this wonderful system of ours, don't you think we should try something else? Duh!

It is the love of money, the same thing the Bible warned us about. Imperialism/globalism is the latest stage of capitalism, that is what all of this is about, follow the money. Just muh opinion

Regime Change and Capitalism
https://dissidentvoice.org/2018/07/regime-change-and-capitalism/

bluedog , says: January 31, 2019 at 1:36 am GMT
@Tyrion 2 From the people fool not by the C.I.A. declaring that well we like the other fellow best for president,after all using the logic you fail to have Hillary could have said call me madam president and leave the orange clown out in the dark,stupid,stupid people
RobinG , says: January 31, 2019 at 2:10 am GMT
@anonymous

"And, in effect, I wish for the success of Juan Guaido in his struggle with Maduro, and I support American diplomatic and economic pressure on Maduro to step down. After all, Venezuela is in our back yard with huge oil reserves."

OMG, Cathey really said that. Is he always such a shit? He certainly has Venezuela completely wrong.

The Making of Juan Guaidó: How the US Regime Change Laboratory Created Venezuela's Coup Leader https://grayzoneproject.com/2019/01/29/the-making-of-juan-guaido-how-the-us-regime-change-laboratory-created-venezuelas-coup-leader/

Larry Wilkerson on the special meeting of the Security Council

Many Countries at UN Oppose Trump Interference in Venezuela

Sergey Krieger , says: January 31, 2019 at 2:15 am GMT
@AnonFromTN This phylosophical questions should not led to no actions. Modern Russia is actually in much better position now than it was in 1913. True. There is never final. Sorry for wrong words choice. Dialectics.
RobinG , says: January 31, 2019 at 2:20 am GMT
@AnonFromTN Tyrion and Sean are both sicko Zio-trolls.
Asagirian , says: January 31, 2019 at 2:25 am GMT
Why not just install the Deep State as president for life? It'd be more honest.
EliteCommInc. , says: January 31, 2019 at 2:38 am GMT
@Wizard of Oz The scenario you describe is an accurate. And requires me to make judgments about a dynamic I am unfamiliar with -- no bite. Several sides to this tale and I have heard and seen it before.

I may however make a call.

In 2017 2/3 of the states in the region chose not to interfere. They have not changed their minds on intervention.

ohh by the way I did ask and here's the familial response:

https://brewminate.com/venezuelans-want-maduro-out-but-oppose-military-intervention-to-remove-him/

EliteCommInc. , says: January 31, 2019 at 2:47 am GMT
@Wizard of Oz https://www.thequint.com/news/world/venezuelans-want-prez-maduro-out-but-oppose-foreign-intervention

https://grayzoneproject.com/2019/01/29/venezuelans-oppose-intervention-us-sanctions-poll/

https://www.thecanary.co/global/world-news/2019/01/29/new-poll-shows-venezuelans-overwhelmingly-oppose-military-intervention-and-us-sanctions/

Just to be fair:

https://www.newsmax.com/newsfront/venezuelans-multinational-intervention-president-nicolas-maduro-economic-situation/2018/09/17/id/882143/

But reading the data sets makes it clear that what they want is some humanitarian relief. B y and large I have the family telling me to mind my own business, but they would like a meal, some medicine and some water.

Asking helps figuring out what to do.

the grand wazoo , says: January 31, 2019 at 2:59 am GMT
By now Trump must be near bat shit crazy. Imagine hundreds of vampires descending on every exposed artery and vein. Does he have a chance in 2020? Not with the people who are around him today.

Regardless of what the MSM reports, the population is fed-up with all the malarkey, and the same old faces.

In Trump's remaining 2 years he must throw off the parasites, bring in real men, and go to work on infrastructure, health care, and real jobs. He has to out the naysayers, the creeps and the war mongers. Throw Bolton from the train, and divorce Netanyahu and Israel. Appeal directly to the public.

If he can he should issue an executive order allowing important items like immigration to go directly to public referendum, by passing congress. We're tired of idiots with personal grudges holding our President hostage. Stern times calls for sterner measures.

AnonFromTN , says: January 31, 2019 at 3:08 am GMT
@RobinG That would be an easy, almost optimistic explanation: some people are venal enough to say or write anything for money. Pessimistic explanation is that some people who can read and write are nonetheless dumb or brainwashed enough to sincerely believe the BS they are writing.
Anonymous [362] Disclaimer , says: January 31, 2019 at 4:19 am GMT
@therevolutionwas

Can you define what capitalism is ? Once that idea is refined, finessed, and compared to multiple color changes of capitalism, it becomes easier who to fit in the plastic infinitely expandable box of ideas of capitalism starting with the chartered company to patient laws to companies making military hardwares paid by tax payers to tax cut by government to seizure of foreign asset by US-UK to protection of the US business by military forces to selling military gadgets to the countries owned by families like Saudi royals Gulf monarchs and to the African ( American installed ) dictators to printing money .

tac , says: January 31, 2019 at 4:58 am GMT
A great article I posted in another thread few days ago dives deep into who Juan Guaido is and his past grooming for the past 10+ years:

Juan Guaidó is the product of a decade-long project overseen by Washington's elite regime change trainers. While posing as a champion of democracy, he has spent years at the forefront of a violent campaign of destabilization.

https://grayzoneproject.com/2019/01/29/the-making-of-juan-guaido-how-the-us-regime-change-laboratory-created-venezuelas-coup-leader/

Here is another:

A great documentary on the 2002 coup d'etat of Chavez: The Revolution Will Not Be Televised, Chavez, The 2002 Coup

[Jan 31, 2019] Supposedly trump is been wanting to attack Venezuela for a while

Jan 31, 2019 | www.unz.com

Harold Smith , says: January 30, 2019 at 5:43 pm GMT

@AnonFromTN

"Whoever believed that Trump will drain the swamp must feel disappointed."

The thing is, Trump just didn't fail to drain the swamp, he "took the ball and ran with it." Apparently he's an enthusiastic imperialist who gets off on the illegitimate use of military force. (His attack on the Shayrat airbase in Syria should end any debate about that).

Supposedly he's been wanting to attack Venezuela for a while:

https://www.theguardian.com/us-news/2018/jul/04/trump-suggested-invading-venezuela-report

Most recently, even Lindsey Graham (of all people) had to talk Trump out of invading Venezuela:

https://www.msn.com/en-xl/latinamerica/top-stories/graham-trump-considered-military-action-in-venezuela/ar-BBSQx31

I can understand Trump's die-hard supporters' argument that Trump is being coerced into doing evil things (although I don't agree with it), but how can they explain Trump's apparent enthusiasm?

The only explanation that makes sense to me is that Trump's anti-war/anti-interventionist tweets from 2013 were insincere and his whole presidential campaign was a brazen fraud.

Edit: I just saw your comment #71; so you apparently see it the same way I do.

Tyrion 2 , says: January 30, 2019 at 5:44 pm GMT
@By-tor Maduro is just Venezuelan Mugabe. Has it really come to this? That people on Unz will support any random lunatic as long as he mouths off about America or Israel every now and again?

Oh, but the sanctions! Proper economic sanctions were only very recently applied. The Venezuelan economy was already utterly wrecked by their joke of a government.

Liken the US not trading with Venezuela to a medieval siege if you like, but I suggest you read up on medieval sieges first. Hint: they weren't merely a government run boycott.

Herald , says: January 30, 2019 at 5:45 pm GMT
@follyofwar The Empire has been overreaching for years and it's now well past time it had its grimy grabbing hands chopped off.
Jotham Tiarks , says: January 30, 2019 at 5:47 pm GMT
@anonymous I fully agree with everything you said I was about to post a comment and then saw yours saying exactly what i was wanting to say!
Ilyana_Rozumova , says: January 30, 2019 at 6:06 pm GMT
@DieselChadron OMG (Oh my God) Globalists Made a mistake.
onebornfree , says: Website January 30, 2019 at 6:07 pm GMT
@onebornfree Some all to rare common sense – a writer who understands that both big government Trump and the big government "opposition" to Trump are not, never were , and never will be, "the answer":

"The Real Problem Is The Politicization Of Everything"

" While on the market and in radically decentralized systems, disagreements and polarization are not a problem, centralized political decision-making has in its nature that only one view can prevail. Suddenly, who is in the White House or whether regulation X or Y is passed does matter a great deal, and those with a different opinion than you on it may seem like actual enemies. Within voluntary settings, one can live with people that one disagrees with. All parties curate a way of life that works while living in peace with others.

To regain civility in human interactions and finally treat other human beings as human beings again, we would do well to get politics out of human affairs."

https://www.zerohedge.com/news/2019-01-30/real-problem-politicization-everything

Very well said.

Regards,onebornfree

Ilyana_Rozumova , says: January 30, 2019 at 6:11 pm GMT
@AnonFromTN Or four the fracking was only Fata Morgana,
Carlton Meyer , says: Website January 30, 2019 at 6:13 pm GMT
For those who think this coup attempt was sudden, here is something from my blog:

Oct 9, 2018 – Ambassador Supports Coup

Few Americans know that our nation imposed harsh economic sanctions on Venezuela because the Neocons want to overthrow its democratic government. They hate that oil rich Venezuela insists on controlling its oil production rather than allowing big American corporations to run things. Almost three years ago, Neocon puppet Barack Obama declared a national emergency to impose sanctions by designating Venezuela an "unusual and extraordinary threat" to national security, and Trump continued sanctions.

The nuttiest member of the Trump administration is UN Ambassador Nikki Haley. Her latest neo-nazi stunt was to join protestors last week calling for the overthrow of the democratically elected government of Venezuela. She grabbed a megaphone at a tiny New York rally and told the few "protesters" (organized by our CIA) to say the USA is working to overthrow their President. This was so bizarre that our corporate media refused to report it. Jimmy Dore assembled this great video of CNN presenting their expert calling the President of Venezuela paranoid for saying the USA wants to overthrow his government. A few hours later, a different CNN report documented recent efforts by the USA to overthrow his government!

AnonFromTN , says: January 30, 2019 at 6:16 pm GMT
@Tyrion 2 This is not about Maduro, or Guaido, who is likely an even bigger shit, as he clearly serves foreign masters. Don't you think it should be up to the people of Venezuela to change their president? The US meddling is against every rule of behavior of countries towards other countries. How would you feel if Burkina Faso told you who should be the president of the US? That's exactly how every Venezuelan who has dignity feels, regardless of their opinion of Maduro and his coterie.
bluedog , says: January 30, 2019 at 6:31 pm GMT
@Mr McKenna What did you expect,before the oath was out of his mouth he was busy cutting taxes for the 1%,for Trump is the swamp .
By-tor , says: January 30, 2019 at 6:35 pm GMT
@Tyrion 2 The US has been plotting against Venezuela since the last Wall Street puppet Pres. Rafael Caldera was defeated by Chavez and ownership of oil assets returned to Venezuela thereby cutting out anf angering the NYC-London predatory globalist cabal. Trump's hitmen are now preventing the Venezuelan state from accessing credit and from withdrawing its own money and gold foolishly deposited in US and London banks. The Venezuelan corporate elite act against the general population. You do not fully understand the situation.
peterAUS , says: January 30, 2019 at 6:37 pm GMT
@Johnny Rottenborough

Ethnonationalist stuff is ridiculous, it's stupid on the face of it, it's ridiculous, I've said it from day one. Ethnonationalism is a dead end, it's for losers. Economic nationalism and civic nationalism bind you together as citizens, regardless of your race, regardless of your ethnicity, regardless of your religion

Interesting.

Ah, well .maybe some other time.
If ever.

Johnny Rottenborough , says: Website January 30, 2019 at 6:38 pm GMT
@Digital Samizdat Digital Samizdat -- As civic nationalism is no kind of nationalism and presents no obstacle to race replacement, I imagine Jewry will be happy with it. Jewry will also be happy that Bannon the race realist ('It's been almost a Camp of the Saints-type invasion into Central and then Western and Northern Europe') has been successfully neutered.

[Jan 31, 2019] Venezuela, the Deep State, and Subversion of the Trump Presidency by Boyd D. Cathey

Notable quotes:
"... In February 2017, it was reported that Abrams was Secretary of State Rex Tillerson 's first pick for Deputy Secretary of State , but that Tillerson was subsequently overruled by Trump. Trump aides were supportive of Abrams , but Trump opposed him because of Abrams' opposition during the campaign. ..."
"... On January 25, 2019, Secretary of State Mike Pompeo appointed Abrams as the United States' Special Envoy to Venezuela ." ..."
"... diplomatic and economic ..."
Jan 31, 2019 | www.unz.com

There he was, right there on the stage to the right side of Secretary of State Mike Pompeo who was briefing the press on America's position concerning the recent coup in Venezuela. I rubbed my eyes -- was I seeing what I thought I was seeing?

It was Elliot Abrams. What was HE doing there? After all, back in February 2017, after then-Secretary of State Rex Tillerson had pushed for his nomination as Deputy Secretary of State, it was President Trump himself who had vetoed his appointment.

Here is how the anodyne account in Wikipedia describes it:

In February 2017, it was reported that Abrams was Secretary of State Rex Tillerson 's first pick for Deputy Secretary of State , but that Tillerson was subsequently overruled by Trump. Trump aides were supportive of Abrams , but Trump opposed him because of Abrams' opposition during the campaign. [emphasis mine]

Abrams during the 2016 campaign had been a NeverTrumper who vigorously opposed Donald Trump and who had strongly attacked the future president's "Make America Great Again," America First foreign policy proposals.

Abrams, a zealous Neoconservative and ardent globalist was -- and is -- one of those foreign policy "experts" who has never seen a conflict in a faraway country, in a desert or jungle, where he did not want to insert American troops, especially if such an intervention would support Israeli policy. He was deeply enmeshed in earlier American interventionist miscues and blunders in the Middle East, even incurring charges of malfeasance.

Apparently, President Trump either did not know that or perhaps did not remember Abrams's activities or stout opposition. In any case, back in 2017 it took an intervention by a well-placed friend with Washington connections who provided that information directly to Laura Ingraham who then, in turn, placed it on the president's desk And Abrams' selection was effectively stopped, torpedoed by Donald Trump.

But here now was Abrams on stage with the Secretary of State.

What was that all about?

Again, I went to Wikipedia, and once again, I quote from that source: " On January 25, 2019, Secretary of State Mike Pompeo appointed Abrams as the United States' Special Envoy to Venezuela ."

Despite President Trump's resolute veto back in February 2017, Abrams was back, this time as a Special Envoy, right smack in the department that President Trump had forbade him to serve in. Did the president know? Had he signed off on this specially-created appointment? After all, the very title "Special Envoy on Venezuela" seems something dreamed up bureaucratically by the policy wonks at State, or maybe by Mike Pompeo.

Then there was the widely reported news, accompanied by a convenient camera shot of National Security Adviser John Bolton's note pad (which may or may not have been engineered by him), with the scribble: "5,000 troops to Colombia."

What gives here?

Last week suddenly there was a coup d'etat in Venezuela, with the head of the national assembly, Juan Guiado, proclaiming himself as the country's new and rightful president, and the theoretical deposition of then-current President Nicolas Maduro. And we were told that this action was totally "spontaneous" and an "act of the Venezuelan people for democracy," and that the United States had had nothing to do with it.

If you believe that, I have an oil well in my backyard that I am quite willing to sell to you for a few million, or maybe a bit less.

Of course, the United States and our overseas intelligence services were involved.

Let me clarify: like most observers who have kept up with the situation in oil-rich Venezuela, I heartily dislike and find despicable the socialist government of Maduro, just as I did Hugo Chavez when he was in power. I have some good friends there, one of whom was a student of mine when I taught in Argentina many years ago, and he and his family resolutely oppose Maduro. Those socialist leaders in Caracas are tin-pot dictator wannabees who have wrecked the economy of that once wealthy country; and they have ridden roughshod over the constitutional rights of the citizens. My hope has been that the people of Venezuela, perhaps supported by elements in the army, would take action to rid the country of those tyrants.

And, in effect, I wish for the success of Juan Guaido in his struggle with Maduro, and I support American diplomatic and economic pressure on Maduro to step down. After all, Venezuela is in our back yard with huge oil reserves.

But potentially sending American troops -- as many as 5,000 -- to fight in a country which is made up largely of jungle and impassible mountains, appears just one more instance, one more example, of the xenophobic internationalism of men like Bolton and the now state department official, Abrams, who believe American boots on the ground is the answer to every international situation. Experience over the past four decades should indicate the obvious folly of such policies for all but the historically blind and ideologically corrupt.

While we complain that the Russians and Chinese have propped up the Maduro government and invested deeply in Venezuela, a country within our "sphere of influence" in the Western Hemisphere (per the "Monroe Doctrine") -- we have done the very same thing, even more egregiously in regions like Ukraine that were integrally part of historical Russia, and in Crimea, which was never really part of Ukraine (only for about half a century) but historically and ethnically Russian. Did we not solemnly pledge to Mikhail Gorbachev, under George H. W. Bush, that if the old Soviet Union would dissolve and let its some fourteen socialist "republics" go their own way, leave the Russian Federation, that we, in turn, would not advance NATO up to the borders of Russia? And then we did the exact opposite almost immediately go back on our word and move our troops and advisers right up to the borders of post-1991 Russia?

From mid-2015 on I was a strong supporter of Donald Trump, and, in many ways, I still am. In effect, he may be the only thing that stands in the way of a total and complete recouping of power by the Deep State, the only slight glimmer of light -- that immovable force who stands up at times to the power-elites and who has perhaps given us a few years of respite as the managerial class zealously attempts to repair the breach he -- and we -- inflicted on it in 2016.

My major complaint, what I have seen as a kind of Achilles' Heel in the Trump presidency, has always been in personnel, those whom the president has surrounded himself with. And my criticism is measured and prudential, in the sense that I also understand what happens -- and what did happen -- when a billionaire businessman, a kind of bull-in-the-china shop (exactly what was needed), comes to Washington and lacks experience with the utterly amoral and oleaginous and obsequious political class that has dominated and continues to dominate our government, both Democrats and, most certainly, Republicans.

The wife of a very dear friend of thirty-five years served in a fairly high post during the Reagan administration. Before her untimely death a few years ago, she recounted to me in stark detail how the minions and acolytes of George H. W. Bush managed to surround President Reagan and subvert large portions of the stated Reagan Agenda. Reagan put his vice-president effectively in charge of White House personnel: and, as they say, that was it, the Reagan Revolution was essentially over.

In 2016 a number of friends and I created something called "Scholars for Trump." Composed mostly of academics, research professors, and accomplished professionals, and headed by Dr. Walter Block, Professor of Economics at Loyola-New Orleans, and Dr. Paul Gottfried, Raffensperger Professor of Humanities at Elizabethtown College, in Pennsylvania, we attempted to gather real professed believers in the stated Trump agenda. We received scant mention (mostly negative) in the so-called "conservative" press, who proceeded to smear us as "ultra-right wingers" and "paleo-conservatives." And, suddenly, there appeared another pro-Trump list, and that one composed largely of the same kinds of professionals, but many if not most of whom had not supported Donald Trump and his agenda during the primary campaigns.

What was certain was that many of the amoral time-servers and power elitists had decided that it was time for them to attach themselves to Trump, time for them to insinuate themselves into positions of power once again, no matter their distaste and scorn for that brash billionaire upstart from New York.

Remember the (in)famous interview that the President-elect had with Mitt Romney who desperately wanted to be Secretary of State? Recall the others also interviewed -- some of whom we remembered as Donald Trump's opponents in the campaign -- who came hat-in-hand to Trump Tower looking for lucrative positions and the opportunity once again to populate an administration and direct policy? And, yes, work from within to counteract the stated Trump agenda?

It would be too facile to blame the president completely: after all, the professional policy wonks, the touted experts in those along-the-Potomac institutes and foundations, were there already in place. And, indeed, there was a need politically, as best as possible, to bring together the GOP if anything were to get through Congress. (As we have seen, under Paul Ryan practically none of the Trump Agenda was enacted, and Ryan at every moment pushed open borders.)

Our contacts did try; we did have a few associates close to the president. A few -- but only a few -- of our real Trump Agenda supporters managed to climb aboard. But in the long run we were no match for the machinations of the power elites and GOP establishment. And we discovered that the president's major strength -- not being a Washington Insider -- was also his major weakness, and that everything depended on his instincts, and that somehow if the discredited globalists and power-hungry Neoconservatives (who did not give Trump the time of day before his election) were to go too far, maybe, hopefully, he would react.

And he has, on occasion done just that, as perhaps in the case of Syria, and maybe even in Afghanistan, and in a few other situations. But each time he has had to pass the gauntlet of "advisers" whom he has allowed to be in place who vigorously argue against (and undercut) the policies they are supposed to implement.

Donald Trump, for all that and for his various faults and miscues, is in reality the only thing standing in the way of the end of the old republic. The fact that he is so violently and unreservedly hated by the elites, by the media, by academia, and by Hollywood must tell us something. In effect, however, it not just the president they hate, not even his rough-edged personality -- it is what he represents, that in 2016 he opened a crack, albeit small, into a world of Deep State putrefaction, a window into sheer Evil, and the resulting falling away of the mask of those "body snatchers" who had for so long exuded confidence that their subversion and control was inevitable and just round the corner.

President Trump will never be forgiven for that. And, so, as much as I become frustrated with some of the self-inflicted wounds, some of the actions which appear at times to go flagrantly against his agenda, as much as I become heartsick when I see the faces of Elliot Abrams -- and Mitt Romney -- in positions where they can continue their chipping away at that agenda, despite all that, I continue to pray that his better instincts will reign and that he will look beyond such men, and just maybe learn that what you see first in Washington is usually not what you'll get.


Taras77 , says: January 29, 2019 at 10:02 pm GMT

Abrams did it for me!

I cannot imagine a more evil person to be allowed back into govt than this man, who is more evil than he looks.

It is over, in my mind, with the trump admin; nothing has been done about the long list of crimes committed by the obama gang during the election and after. Nothing has been done about seth rich, I would add michael hastings, and the long list of clinton "suicides" and the clinton crimes. the list is endless with no progress.

The dimos in doj, fbi, etc have completely out-manuevered trump and he really has no junk yard dog to protect him-guliani is a joke, even if he is sober as he claims to be.

Big sigh, depressing.

anonymous [340] Disclaimer , says: January 30, 2019 at 12:24 am GMT
Scholars? For Trump? Still?

Linh Dinh on this website (June 12, 2016) predicted both the election outcome and its meaninglessness. He had by then, of course, been blackballed by Scholars, Inc., and is now helping to run a recycling operation back in Vietnam. But he has emerged as one of the top Unz columnists, most of his Heritage American attackers who couldn't see past their DNA having slunk away.

Conversely, go read the comment thread under Mr. Buchanan's latest. People who used to fall for the "we/us/our" conflation of their country and Uncle Sam are waking up, due largely to the President in whom you still place your scholarly hope. We may not be scholars, but we understand that the blood of people in places like Iraq, Libya, Syria, and soon enough Venezuela is on the hands of those who endorse the warmongering imperialism of Exceptionalia. Your scholarly enabling, such as:

"And, in effect, I wish for the success of Juan Guaido in his struggle with Maduro, and I support American diplomatic and economic pressure on Maduro to step down. After all, Venezuela is in our back yard with huge oil reserves."

is naive at best. As a scholar, did you support the "economic pressure" rationalized by Secretary of State Albright that killed hundreds of thousands of Iraqis, many of them children?

Those of you who still expect the Unz readership to give two sh ** s about Donald Trump or anyone else in the Washington Puppet Show are fast losing your relevance around here.

Ma Laoshi , says: January 30, 2019 at 1:09 am GMT
Yup, Personnel is Policy; always has been. The scale of it all really precludes the kind of benefit-of-the-doubt explanation the author struggles to formulate. It's not that Trump tried to do the right thing but some war-hawks, jews, and Wall-Street shysters got through regardless. Those were the only people that needed apply because Trump wasn't considering anybody else. One simply has to conclude that the people that currently surround him are indeed "his kind of people". And let's not forget that after a crash course in the realities of government he replaced Tillerson and notorious torturer McMaster because they were not hawkish, not pro-Israel, enough .

What evidence is there that your definition of "doing the right thing" coincides with Trump's anyway. Yes he made some non-interventionist noises during the campaign, but that was mostly during the primary before he'd kissed Adelson's ring in exchange for the shekels. But he was also "a very militaristic guy" who was all for "taking the oil" and who nonstop hated on Iran. Face it, it was just the Obama playbook: throw an incoherent mishmash to the proles in the hope that they remember only those parts they liked.

Isn't Trump's CV rather more illuminating on who he is than his campaign rhetoric: casino operator and pro-wrestling MC. He gets off on playing the rubes.

peterAUS , says: January 30, 2019 at 1:31 am GMT
Excellent, and timely article.

From mid-2015 on I was a strong supporter of Donald Trump, and, in many ways, I still am. In effect, he may be the only thing that stands in the way of a total and complete recouping of power by the Deep State

Donald Trump, for all that and for his various faults and miscues, is in reality the only thing standing in the way of the end of the old republic.

.despite all that, I continue to pray that his better instincts will reign and that he will look beyond such men, and just maybe learn that what you see first in Washington is usually not what you'll get.

Scholar, a? Man, you ..Anyway.

Impressive.

Carlton Meyer , says: Website January 30, 2019 at 5:43 am GMT
The US military has kept some 3000 soldiers in Columbia for years. Maybe that has grown to 5000, but Bolton's yellow pad note was a simple trick to fool simpletons. Invading Venezuela would require at least 50,000 US troops.

Americans are quick to denounce socialists, especially those in the US military who thrive in a socialist US military. Most Americans do not realize that their police, firefighters, schools, most universities, roads, water, and electricity are products of socialism. If you have an emergency in the USA, you dial 9-11 for socialists to help you. Everyone thinks that is great!

From my blog:

Jan 27, 2019 – A Clumsy Slow Coup

Corporate America media has not reported basic facts about the attempted takeover of Venezuela. The Deep State has tried to overthrow the popular, elected government of Venezuela for a decade as it gradually nationalized its oil production. Several coup attempts failed so the USA imposed sanctions to punish the people for voting wrong. Sanctions caused shortages and inflation but the elected government remains in power.

In the past, the USA conducted coups by bribing Generals to conduct a quick military takeover, and always denied participation. The Trump administration gave up on deception and began a clumsy, slow coup. I suspect Trump's new CIA appointed attorney general told Trump that he had the power to appoint foreign presidents, so last week he openly appointed a new president for Venezuela. The Venezuelan army openly backs the existing president so nothing changed. The UN did not recognize Trump's puppet president nor did any other major world power. These facts do not appear in our corporate media, although the internet provides reality via a Paul Craig Roberts article. (posted at unz.com)

Trump has now ordered other nations to send payments for oil purchases to a bank account controlled by his new president. This infuriates foreign governments because they know oil shipments will stop if they fail to pay the legitimate government of Venezuela, and oil prices will rise worldwide as they scramble to buy oil elsewhere. Meanwhile, a massive humanitarian and refugee crisis is building as the result of this economic embargo.

Ilyana_Rozumova , says: January 30, 2019 at 6:09 am GMT
I do not know how the fracking is going in the winter. I have read somewhere, that yields from fracking are going down. also that fracking companies are moving down to Texas.Also I do not know the state of strategic reserves, But I definitely suspect that moves in Venezuela were planed long before. so I have to presume that this is all about price of oil.
Trump quite a while ago, quite eagerly said something about moving on Venezuela.
Trump can be easily triggered by any economic subject by which US gains. But I do suspect that in this case it could be economic necessity. (What would be a real shame.)
follyofwar , says: January 30, 2019 at 4:04 pm GMT
@Taras77 I agree Taras. Although I much enjoyed reading Boyd Cathey's essay, sadly, I think he remains too optimistic. With the D's back in charge of the House, and the R's impotent in the Senate, (McConnell as majority leader is a joke), Trump's stated agenda is all over. He got nothing in his first two years besides the traditional GOP tax cut for the rich. And he waited far too long to get serious about the wall. Yes, Koch-man Paul Ryan opposed it, but surely Trump could have tried harder to get enough R votes to override him. His only option now, unless Pelosi budges a little, would be to declare a National Emergency on Feb 15. There is no way he could shut down the government again. Let's see how that goes.

However I disagree with Realist's comment. With Trump being attacked viciously on all sides, I don't understand how anyone could think he is part of the Deep State. I think Victor Davis Hanson got it right when he called Trump a "Tragic Hero."

AnonFromTN , says: January 30, 2019 at 4:20 pm GMT
Whoever believed that Trump will drain the swamp must feel disappointed. The US foreign policy is run by the swamp now, like it always was. The US uses full range of classical gangster tactics against Venezuela: blackmail, theft of assets, threats, etc. The US tries to instigate yet another "color revolution" to bring yet another puppet to power in yet another country. The only difference is, Maduro resists. But that's the difference in the victim country, not in DC.

[Jan 31, 2019] Venezuella and the price of oil

Jan 31, 2019 | www.unz.com

Ilyana_Rozumova , says: January 30, 2019 at 6:09 am GMT

I do not know how the fracking is going in the winter. I have read somewhere, that yields from fracking are going down. also that fracking companies are moving down to Texas.Also I do not know the state of strategic reserves, But I definitely suspect that moves in Venezuela were planed long before. so I have to presume that this is all about price of oil.
Trump quite a while ago, quite eagerly said something about moving on Venezuela.
Trump can be easily triggered by any economic subject by which US gains. But I do suspect that in this case it could be economic necessity. (What would be a real shame.)
Alfred , says: January 30, 2019 at 9:14 am GMT
@Ilyana_Rozumova It is not clear whether you are saying that Trump is trying to raise or lower oil prices.

If he wants to lower oil prices then why is he making it difficult for Iran to sell its oil?

If he wants to raise oil prices then why does he want the big US oil companies in Venezuela to sort out that country's oil business and raise exports?

I suspect he, and those around him, have no idea what they want to achieve. They are simply trying to demonstrate their "power" and ability to change regimes. To give the Monroe Doctrine a bit of oxygen. To scare the European vassals.

Realist , says: January 30, 2019 at 10:39 am GMT

Venezuela, the Deep State, and Subversion of the Trump Presidency

You're being rolled. Trump is part of the Deep State. Otherwise explain Bolton, Pompeo, Abrams and all the other dickheads Trump has hired.

Realist , says: January 30, 2019 at 10:44 am GMT
@Taras77 Correct, Trump is a member of the Deep State. Trump's election and big talk is a charade. It is hard to believe anyone would not see Trump as a chimera after all his bullshit.
Realist , says: January 30, 2019 at 10:53 am GMT

After all, Venezuela is in our back yard with huge oil reserves.

There it is .the reason the US is involved in Venezuelain politics .we want their oil.

renfro , says: January 30, 2019 at 7:29 am GMT
@Ilyana_Rozumova

Also I do not know the state of strategic reserves, But I definitely suspect that moves in Venezuela were planed long before

Trump is doing the same thing he did in his businesses ..using 'other people's money.assests' to cover his ass.
Now picture this ..sanctions on Iran, sanctions on Russia, sanctions on Venezuela + rising US interest rates + a slowing economy + half of US oil reserves sold to cover government spending.
Hope people get use to riding a bike when this perfect storm hits.

WH Proposes Selling Half the U.S. Strategic Oil Reserve
https://www.thedailybeast.com/trump-proposes-selling-half-the-us-strategic-oil-reserve
President Trump's proposal to slim down the national debt includes a plan to sell off about half of America's emergency oil stockpile -- made up of 687.7 million

And sold

U.S. sells 11 million barrels of oil from reserve to Exxon, five other firmshttps://www.reuters.com/article/us-usa-oil-reserve/u-s-sells-11-million-barrels-of-oil-from-reserve-to-exxon-five-other-firms-idUSKCN1LG2WT
WASHINGTON (Reuters) – Six companies, including ExxonMobil Corp, bought a total of 11 million barrels of oil from the U.S. Strategic Petroleum Reserve, a Department of Energy document showed on Friday, in a sale timed to take place ahead of U.S. sanctions on Iran that are expected to remove oil from the global market.
Sale of the oil from the reserve was mandated by previous laws to fund the federal government and to fund a drug program, but the Trump administration took the earliest available time to sell the crude under the law.
The sale's timing "would appear to reflect President Donald Trump's concern regarding oil market tightness associated with the reinstatement of Iran oil sanctions," analysts at ClearView Energy Partners said after the sale was announced on August 20.

Any wonder they want to control Venezuela oil?

Amon , says: January 30, 2019 at 12:07 pm GMT
@Carlton Meyer A slight correction is needed here. The UK, Germany, Israel and France has signed onto this.

Just as all four of them were more than willing to help smash Libya to dust so they could steal their oil fields and all that gold Gaddafi had hoarded up for his independent gold back African currency.

Truly, Venezuela will be a Libya 2.0.

Honesty , says: January 30, 2019 at 1:17 pm GMT
I think what is happening in Venezuela is not an isolated event. It is connected to a broad "connect the dots" South American strategy. The other dots are:

1) Bolsonaro's election victory.
2) Changes in structural relationship with Argentina, Chile, Colombia.
3) Cuba isolation.
4) Bolivia isolation.
5) And finally the recent unexpected dam collapse in Brazil, followed by IDF's offer to fly in hundreds of soldiers to help.

S America is about to become the next Middle East (Syria). Weapons proliferation. War profiting. Mass scale disruption. Already a profound refugee crisis. And all the traditional war hawks there – with IDF leading the charge.

Harold Smith , says: January 30, 2019 at 1:28 pm GMT

"And, in effect, I wish for the success of Juan Guaido in his struggle with Maduro, and I support American diplomatic and economic pressure on Maduro to step down. After all, Venezuela is in our back yard with huge oil reserves."

So in effect, you wish for the success of the globalists in their relentless struggle with the concept of national sovereignty and the rule of law, and you support American imperialist efforts to overthrow yet another democratically elected government, no matter how many people have to die in the process. After all, the victim country is relatively close and its huge oil reserves make for a reasonable pretext.

jacques sheete , says: January 30, 2019 at 2:23 pm GMT

Venezuela, the Deep State, and Subversion of the Trump Presidency

Also on UR, link to,

Bolton: We're Taking Venezuela's Oil
Yesterday, Trump's National Security Advisor John Bolton made the US position clear in a FoxNews interview: Washington will overthrow the Venezuelan
RON PAUL LIBERTY REPORT

nsa , says: January 30, 2019 at 3:12 pm GMT
@Johnny Rico "How many barrels a day does Venezuela pump?"
Something like 50,000 barrels per day. And pumped is perhaps the wrong word more like mined. Venezuelan oil is locked up in surface tar sands along the Orinoco River and of very low quality, rich in metals such as vanadium which catalyze sulfur into sulfuric acid rotting out engines and turbines if not cleaned up. It is actually sold as a emulsion with about 25% water to get the stuff to flow. The Canadian tar sands now produce something like 500,000 barrels per day. Try driving through the Alberta tar sands to see mommie earth ravaged without conscience and birds murdered en masse landing on their vast polluted effluent ponds but then the loathsome colonial denizens of our Canadian satrap to the north don't care as long as we let them have a couple of hockey teams and legal pot.
AnonFromTN , says: January 30, 2019 at 4:20 pm GMT
Whoever believed that Trump will drain the swamp must feel disappointed. The US foreign policy is run by the swamp now, like it always was. The US uses full range of classical gangster tactics against Venezuela: blackmail, theft of assets, threats, etc. The US tries to instigate yet another "color revolution" to bring yet another puppet to power in yet another country. The only difference is, Maduro resists. But that's the difference in the victim country, not in DC.
By-tor , says: January 30, 2019 at 4:28 pm GMT
@Tyrion 2 Venezuela is under US sanctions that substitute for a medieval siege, and Venezuela's comprador ruling class are Wall Street loyalists, not nationalists. The US is trying to starve the population of Venezuela and economically ruin them wherein a US puppet gov't will enable predatory Americans to buy coveted resources on the cheap. This usurpation of int'l law and criminality was pulled off by Obama-Nuland-Soros in Ukraine in 2014. The majority of Venezuelan 'deplorables' who are bearing the brunt of US sanctions know well what Uncle Sham's man-on-the-ground Guaido is up to, and have, hopefully, organized and armed themselves with rifles to defend their lives and property from invaders.
follyofwar , says: January 30, 2019 at 4:30 pm GMT
@Amon It's possible that Venezuela will be another Libya. But I question whether the US Imperialists could get away with weeks of saturation bombing on a country in the same hemisphere, just to its south. I find it hard to believe that the rest of South America would take this lying down. Then there's the presence of Russia and China, who both have substantial investments in the country. Will they just sit on their hands too?

With its jungles and mountains, any US invasion would be more like Vietnam, I think. This could be, and I hope it is, a Bridge Too Far for the Empire. Empires always eventually overreach.

Rags , says: January 30, 2019 at 4:36 pm GMT
But, bbbuuuttt, I thought we were gonna be energy independent and export oil all over the globe. What need have we of some heavy crude in Venezuela if this forecast is at hand? Just hedging the BS ya know.
Sergey Krieger , says: January 30, 2019 at 4:44 pm GMT
Maduro and Chavez are as socialist as I am capitalism fan. They are indeed populist dictators and regime is still capitalistic. They just rely upon lumpens and military to hold onto power. Things wound not change for the better and probably for worse if coup succeeds though. Now, it is neither USA nor author's business to interfere into other countries affairs as Americans quite obviously only make things worse and what if when USA finally kicks the bucket as United country others start interfering in USA affairs ? I actually see it coming considering demographic and cultural realities on the ground in USA. Once $usd is gone as reserve currency the process as Gorbachiv stated would start.
republic , says: January 30, 2019 at 4:46 pm GMT

Last week suddenly there was a coup d'etat in Venezuela,

actually the use of the term coup d'etat is incorrect. A coup occurs when the military disposes the government and replaces it with a military government.

This has not yet occurred. It has not yet been successful, what is actually happening is the beginning of a civil war, the outcome which is not clear.

The situation bears a certain similarity with the beginning of the Syrian civil War.

If it follows the Ukrainian scenario like what took place in 2014, then I would expect some type of situation where foreign mercenaries are employed to create divisions in the population, like firing on the opposition supporters. It is highly likely that some sort of false flag incident will be use to fire up the situation.

If the military were to revolt and replace it with civilian rule it would be called a pronunciamiento

AnonFromTN , says: January 30, 2019 at 5:16 pm GMT
Trump just congratulated self-proclaimed US puppet Guaido in Venezuela. So, he can no longer pretend to be an innocent bystander: he showed himself to be a willing participant in the criminal activities of the swamp.

Three notes on the bright side. One, the Empire is getting ever more reckless, no longer bothers even with fig leaves. That looks like an overreach typical of empires in their death throws. Two, Maduro, despite his obvious failings, appears to be prepared to defend his country against banditry. So, maybe he is not just a piece of shit, like Yanuk in Ukraine. We'll see soon enough. Three, Erdogan, who the same gangsters tried to overthrow not too long ago, remembers that and voiced his support of Maduro in no uncertain terms, despite Turkey being a NATO member.

[Jan 29, 2019] Bloodbath In Oil Gas Stocks Could Continue by Nick Cunningham

Notable quotes:
"... In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale." ..."
"... Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the WSJ found that company forecasts seemed to be misleading. ..."
"... Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward, projecting enormous growth numbers that have not panned out. ..."
Jan 04, 2019 | finance.yahoo.com

Of course, that is largely just a reflection of the sharp decline in oil prices. But the share prices of most oil and gas companies are also largely based on oil price movements. So, the steep slide in oil prices in the final two months of 2018 led to disaster for investors in energy stocks.

"The stock market went to hell in December. And when it got there, it found that the energy sector had already moved in, signed a lease and decorated the place," Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis (IEEFA), wrote in a commentary .

The energy sector was at or near the bottom of the S&P 500 for the second year in a row, Sanzillo pointed out. And that was true even within segments of the oil and gas industry. For instance, companies specializing in hydraulic fracturing fell by 30 percent, while oil and gas supply companies lost 40 percent. "The fracking boom has produced a lot of oil and gas, but not much profit," Sanzillo argued.

Looking forward, there are even larger hurdles, especially in the medium- to long-term. Oil demand growth is flat in developed countries and slowing beginning to slow in China and elsewhere. The EV revolution is just getting started.

The last great hope for the oil industry is to pile into petrochemicals , as oil demand for transportation is headed for a peak. But profits in that sector could also prove elusive. "The industry's rush to invest in petrochemicals to maintain demand for oil and gas is likely to continue, but the profit potential in this sector is more limited than oil and gas exploration, and is likely to keep the energy sector at or near the bottom of the S&P 500," Sanzillo concluded.

In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale."

Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the WSJ found that company forecasts seemed to be misleading.

Related: 2019 Could Make Or Break OPEC

"Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota," reporters for the WSJ wrote . "Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm."

Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward, projecting enormous growth numbers that have not panned out.

The upshot is that shale companies will have to step up spending in order to hit the promised production targets. However, so many of them have struggled to turn a profit, and the recent downturn in oil prices has put even more pressure on them to rein in costs.

That raises questions about the production potential not just from individual shale companies, but also from the U.S. as a whole.

By Nick Cunningham of Oilprice.com

[Jan 29, 2019] Will Oil Prices Rise in 2019?

The problem is that the lower average price of oil, the less capex are for the year. And that creates problems in two to three years period.
As long as shale oil producers are capable to produce junk bond, they will continue extraction even in prize zone below $60, where they can't recover the costs. Cheerleaders from IEA will continue to produced nice rising curves.
Jan 08, 2019 | community.oilprice.com

Tom Kirkman

23 hours ago, William Edwards said:

Rather than troubling you by disagreeing, Tom, may I request, instead, your basis for selecting $70 as the point where the economy and oil producers meet? My method uses step-wise accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D of worldwide total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian Oil Sands producers will confirm, the producer does not always cover his cost. So the $60 number is higher than the practical top. (This explains why the actual average price over history is $40.)

The reality is that as long as you have spare producing capacity, which we always do, that can produce oil at less than $10/B as your competition, you can forget recovering your higher cost unless you can hoodwink the traders. Of course, the hoodwinked traders' motto is "Fooled me once, shame on you! Fooled me twice, shame on me!

Nicely put, William.

The niggling thing about the $40 average price over history is that the bulk of the easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already harvested.

Which means that extraction costs will increase.

So... while $40 is historically accurate for oil, that number is not static, and seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil fruit from further up the tree - easy pickings gone already.

U.S. Shale Oil pundits generally seem to agree that $50 or so is the breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts from the equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.


Osama

Hi!

Here are my thoughts on oil prices for 2019 (short term). Would love to have your thoughts on it.

https://seekingalpha.com/article/4231469-will-oil-prices-rise-2019

Tom Kirkman

I fully expect oil prices [Brent] to rise to around $70 average for 2019. WTI is a totally different animal.

https://community.oilprice.com/topic/4587-hmmm-sounds-oddly-familiar-70-oil-could-be-right-around-the-corner/?do=embed

https://community.oilprice.com/topic/4220-oil-slide-worries-traders-relax-this-should-get-sorted-by-year-end/?do=embed

If anybody here hasn't heard my hundreds of ad nauseum comments this entire dang year about my hope for $65 oil [Brent] for 2018 and my hope for $70 oil [Brent] for 2019, please raise your hand, and I can reiterate yet again .

Meanwhile, I'll gently remind that I already warned repeatedly this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the eventual crash would likely be.

And over to the news, would everyone kindly lay off guzzling the pots of coffee and stop artificially panicking. Near as I can tell, $70 - ish oil for 2019 still seems about the right balance between the global economy and oil producers. I hope the current over-reaction on the oil price See Saw will settle back to around $70 by end of this year or early next year. Just my opinion; as always, you are free to disagree.

Karl V

hellenicshippingnews.com said yesterday , that the average price for WTI had been $65 and $72 for Brent in year 2018 , with a high at 3rd October and low at 24th December .

Overall , I would predict a lower average for 2019 , than for 2018 ; average prices like during years 2015 and 2016 ($50) .

Opec+ might throttle supply , but if Iran sanctions will screw further , Opec+ will be able to push more oil onto the markets .

Venezuela might get online again , since I can't believe , that China and Russia will stay neutral in regards to their investments .

Brazil will deliver more , and Mexico probably could reduce domestic oil theft .

Canada is only capable to throttle production , due to authoritie's measures , if drillers are left to heir own devices , the production in Canada will rise again .

Without any governmental regulations worldwide (International Socialism) oil could cost even $20 and less .

Nevertheless , WTI and Brent likely are worth more than many crudes , since they have short ways to their markets : The lower the transportation costs , the higher the oil price .

Electric Vehicles are still not yet deployed much , but in 10 years may make up to 10% of cars in use worldwide .

Power-To-Gas and -To-Gasoline will likely become deployed in the next 10 years to come , increasing the pressure on crude oil prices .

From tecson.de : https://www.tecson.de/historische-oelpreise.html

Osama
On 1/5/2019 at 1:49 AM, Tom Kirkman said:

I fully expect oil prices [Brent] to rise to around $70 average for 2019. WTI is a totally different animal.

https://community.oilprice.com/topic/4587-hmmm-sounds-oddly-familiar-70-oil-could-be-right-around-the-corner/?do=embed

https://community.oilprice.com/topic/4220-oil-slide-worries-traders-relax-this-should-get-sorted-by-year-end/?do=embed

If anybody here hasn't heard my hundreds of ad nauseum comments this entire dang year about my hope for $65 oil [Brent] for 2018 and my hope for $70 oil [Brent] for 2019, please raise your hand, and I can reiterate yet again .

Meanwhile, I'll gently remind that I already warned repeatedly this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the eventual crash would likely be.

And over to the news, would everyone kindly lay off guzzling the pots of coffee and stop artificially panicking. Near as I can tell, $70 - ish oil for 2019 still seems about the right balance between the global economy and oil producers. I hope the current over-reaction on the oil price See Saw will settle back to around $70 by end of this year or early next year. Just my opinion; as always, you are free to disagree.

What are your thoughts on the recent news regarding Shale wells drying fast than they should...I read in WSJ.

Also, $70 doesn't looks that impossible too...yes.

Summer Driving Season and if and when a thaw between U.S. and China's trade war....can certainly take oil to the said level.

NWMan
On 1/5/2019 at 9:39 AM, Karl V said:

Without any governmental regulations worldwide (International Socialism) oil could cost even $20 and less  .

Oil could only cost $20, if Saudi Arabia decided to supply the world with oil by itself - a large amount of our oil supply is from offshore Nigeria, Angola, Gulf of Mexico (Mexico - USA), North Sea, Brazil, Oil sands, Oil shale, - these locations require $60 oil minimum.

Osama
On 1/7/2019 at 11:20 AM, NWMan said:

Oil could only cost $20, if Saudi Arabia decided to supply the world with oil by itself - a large amount of our oil supply is from offshore Nigeria, Angola, Gulf of Mexico (Mexico - USA), North Sea, Brazil, Oil sands, Oil shale, - these locations require $60 oil minimum.

Well....Mr. @William Edwards here have explained the pricing in a very cogent manner. I'd find the link of the discussion and post it.here.

tetonper

If you are buying oil indexes price of oil is important. If you are buying stocks the question is, will prices go up or down on stocks. There are a lot of companies that are making a profit at the lower prices. Furthermore there is a lot of companies with significant cash on hand. They also have low P/E, some in single digits and others in low double digits. Combine this with the fact that with a little research many of these stocks are rated sells or at best hold and analysts are rating them as bearish or extremely bearish, there is a good opportunity for some significant increase. Especially in a market that is still very high. Granted if the market tumbles again, it is hard to go against the tide. Looks like there is a lot of money to be made in some of these stocks. Some of them will assuredly be targets for bigger companies wanting to consolidate acreage, others wanting stronger positions in the Permian, Eagle Ford and SCOOP/STACK plays. Over the next month and maybe 2 there will be a lot of money made. There is also a lot of insider trading going on, such as the purchase of $4 million in CHK by an exec. Not a fan of CHK but there are a lot of people who have made a lot of money on them in recent weeks. The reality is oil prices probably won't plunge even if the stock market goes south in an ugly fashion again, and with Saudis, Iran and reduction in rigs in the shale plays across America, market sentiment will probably carry prices at least through mid-Feb. That is plenty of time for oil and gas stocks to claw back some gains based on the big fall they have had. Just my thoughts after 40 years of working in and watching this industry.

Tom Kirkman
On 1/7/2019 at 10:51 AM, Osama said:

Wha  t  are your thoughts on the recent news regarding Shale  wells drying fast than they should...I read in WSJ. 

https://community.oilprice.com/topic/4652-happy-dance-us-shale-oil-slowdown/?do=embed

William Edwards

Will Prices Rise in 2019? Yes, and fall, and end the year much lower than most observers expect. Hint: IMO 2020.

William Edwards
On 1/5/2019 at 1:49 AM, Tom Kirkman said:

I fully expect oil prices [Brent] to rise to around $70 average for 2019. WTI is a totally different animal.

https://community.oilprice.com/topic/4587-hmmm-sounds-oddly-familiar-70-oil-could-be-right-around-the-corner/?do=embed

https://community.oilprice.com/topic/4220-oil-slide-worries-traders-relax-this-should-get-sorted-by-year-end/?do=embed

If anybody here hasn't heard my hundreds of ad nauseum comments this entire dang year about my hope for $65 oil [Brent] for 2018 and my hope for $70 oil [Brent] for 2019, please raise your hand, and I can reiterate yet again .

Meanwhile, I'll gently remind that I already warned repeatedly this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the eventual crash would likely be.

And over to the news, would everyone kindly lay off guzzling the pots of coffee and stop artificially panicking. Near as I can tell, $70 - ish oil for 2019 still seems about the right balance between the global economy and oil producers. I hope the current over-reaction on the oil price See Saw will settle back to around $70 by end of this year or early next year. Just my opinion; as always, you are free to disagree.

Rather than troubling you by disagreeing, Tom, may I request, instead, your basis for selecting $70 as the point where the economy and oil producers meet? My method uses step-wise accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D of worldwide total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian Oil Sands producers will confirm, the producer does not always cover his cost. So the $60 number is higher than the practical top. (This explains why the actual average price over history is $40.) The reality is that as long as you have spare producing capacity, which we always do, that can produce oil at less than $10/B as your competition, you can forget recovering your higher cost unless you can hoodwink the traders. Of course, the hoodwinked traders' motto is "Fooled me once, shame on you! Fooled me twice, shame on me!

Tom Kirkman
23 hours ago, William Edwards said:

Rather than troubling you by disagreeing, Tom, may I request, instead, your basis for selecting $70 as the point where the economy and oil producers meet? My method uses step-wise accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D of worldwide total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian Oil Sands producers will confirm, the producer does not always cover his cost. So the $60 number is higher than the practical top. (This explains why the actual average price over history is $40.) The reality is that as long as you have spare producing capacity, which we always do, that can produce oil at less than $10/B as your competition, you can forget recovering your higher cost unless you can hoodwink the traders. Of course, the hoodwinked traders' motto is "Fooled me once, shame on you! Fooled me twice, shame on me!

Nicely put, William.

The niggling thing about the $40 average price over history is that the bulk of the easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already harvested.

Which means that extraction costs will increase.

So... while $40 is historically accurate for oil, that number is not static, and seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil fruit from further up the tree - easy pickings gone already.

U.S. Shale Oil pundits generally seem to agree that $50 or so is the breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts from the equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.

William Edwards
23 hours ago, Tom Kirkman said:

Nicely put, William.

The niggling thing about the $40 average price over history is that the bulk of the easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already harvested.

Which means that extraction costs will increase.

So... while $40 is historically accurate for oil, that number is not static, and seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil fruit from further up the tree - easy pickings gone already.

U.S. Shale Oil pundits generally seem to agree that $50 or so is the breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts from the equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.

May I differ on one point? Low-hanging fruit is forever! I do no know for sure, since my x-ray vision fails below 5000 ft, how much cheap oil lies below the Saudi (and Iraq and Iranian) deserts. But I do know two things. 1) I have been told for forty years that the proven reserves in Saudi Arabia are 300 Billion barrels. It has not changed even though 10,000,000 B/D are pumped out continuously. But I do not have to know. I only need to know if it will ever run out. I am sure that it will not. The oil under the desert will, someday, be worth no more than the sand that covers the desert. 2) Quantity of reserves is like spare capacity. As long as there is enough, it matters not how much more than "enough" exists. As long as the Middle East reserves are not running at full capacity and fully depleted, $10 oil will be available. Must I remind you that the stone age did not run out of stones? Or the nuclear age run out of uranium? Better replaces inferior.

[Jan 23, 2019] Venezuela Oil Sanctions Likely to Hit Some U.S. Refiners Hard - Bloomberg

Jan 23, 2019 | www.bloomberg.com

Some U.S. Refiners Hard

By
Lucia Kassai , Jennifer A Dlouhy , and David Marino
‎January‎ ‎23‎, ‎2019‎ ‎5‎:‎18‎ ‎PM Venezuela Oil Sanctions Likely to Hit Some U.S. Refiners Hard
By
Lucia Kassai , Jennifer A Dlouhy , and David Marino
, ‎January‎ ‎23‎, ‎2019‎ ‎5‎:‎18‎ ‎PM
Source: Bloomberg
Source: Bloomberg

Refiners in Texas and Louisiana would be hard hit by sanctions on Venezuelan crude under consideration at the White House, a move that would leave U.S. oil companies struggling to find alternative supplies.

President Donald Trump recognized Juan Guaido as the interim president of Venezuela on Wednesday in the most provocative move yet against the leftist regime of Nicolas Maduro. Maduro responded by breaking diplomatic relations with the U.S., giving American diplomats 72 hours to leave the country. The Trump administration has drafted a slate of sanctions but hasn't decided whether to deploy them, said people familiar with the matter. Earlier this month, White House officials warned U.S. refiners that sanctions were being considered, and advised them to seek alternative sources of heavy crude. Some U.S. refiners worried about sanctions experimented with alternatives last year before ultimately returning to Venezuelan crude.

The hardest-hit would be Citgo Petroleum Corp., the refining arm of Petroleos de Venezuela SA , or PDVSA, the state-run oil company. Citgo imported the most Venezuelan crude in the first 10 months of 2018, followed by Valero Energy Corp.

Royal Dutch Shell Plc and Phillips 66 haven't processed Venezuelan crude in their U.S. refineries since the U.S. imposed financial sanctions against the country and PDVSA in August 2017. Marathon Petroleum Corp., Total SA and Motiva Enterprises LLC cut intake by more than a half during that period, and as Venezuelan oil production slumped to the lowest levels seen since the 1940s.

Oil companies have urged the Trump administration not to limit imports of Venezuelan oil, warning the action could disadvantage Gulf and East Coast refiners designed to handle the country's heavy crude, while also causing gasoline prices to rise.

[Jan 22, 2019] Saudi trick before the cut in 2019

Notable quotes:
"... That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So Saudi's November increase was mostly just emptying their storage tanks. ..."
Jan 22, 2019 | peakoilbarrel.com

Energy News says: 01/21/2019 at 8:03 am

2019-01-21 (JODI Data) Saudi Arabia crude oil inventories declined by -9.6 million barrels in November
Chart on Twitter https://pbs.twimg.com/media/Dxb2106X0AEVusm.jpg
Ron Patterson says: 01/21/2019 at 8:27 am

That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So Saudi's November increase was mostly just emptying their storage tanks.

And from looking at your chart, it looks like the 135,000 barrel per day increase in October was from the same source.

Saudi cuts start from a base of 10,633,000 barrels per day. That is almost their exact production in October. And your chart shows Saudi inventories had been dropping for months. Saudi had obviously been preparing to "cut" production from a level of production they reached by emptying their storage tanks.

[Jan 21, 2019] IEA OPEC+ Cuts Put Floor Under Oil Prices

Jan 21, 2019 | oilprice.com

OPEC released its Oil Market Report in recent days, which showed that the cartel slashed output by 750,000 bpd in December – sharp reductions that came before the deal even went into effect. Saudi Arabia led the way with 468,000 bpd in reductions, but its efforts were aided by the involuntary losses from Iran (-159,000 bpd), Libya (-172,000 bpd) and Venezuela (-33,000) bpd.

In fact, those three countries have accounted for massive output reductions over the past two months. The OPEC+ deal is using October as a baseline, calling for 1.2 million barrels per day (mb/d) in reductions, and the group is well on their way thanks to turmoil in just a few countries. Over the course of November and December, Iran has lost 561,000 bpd, Libya has lost 190,000 bpd, and Venezuela's output fell by 58,000 bpd. Taken together, the involuntary outages exceed 800,000 bpd.

[Jan 14, 2019] Seventy dollars per barrel for the end of the 2019 looks entirely reasonable price for some experts

But that probably does not not including possible "back channel" from the US government to major banks which allow them to finance unprofitable oil extraction.
Notable quotes:
"... $70/b by the end of 2019 is very reasonable [estimate] and actually similar to many of the major banks. The $55/b average expectation of oil executives according to Dallas Fed is too low in my opinion. ..."
Jan 14, 2019 | peakoilbarrel.com

GuyM

x Ignored says: 01/13/2019 at 1:52 pm
https://oilprice.com/Energy/Energy-General/Could-Oil-Prices-Rise-By-25-Per-Barrel-In-2019.html

Not too unreasonable. Higher than most.

Dennis Coyne x Ignored says: 01/13/2019 at 4:29 pm
GuyM,

Agree, Rapier is very good. $70/b by the end of 2019 is very reasonable [estimate] and actually similar to many of the major banks. The $55/b average expectation of oil executives according to Dallas Fed is too low in my opinion. Rapier is spot on (within $5/b of being correct) imo.

GuyM x Ignored says: 01/13/2019 at 5:03 pm
I think the inventory draws will be much deeper than most expect, so it could be higher.
Dennis Coyne x Ignored says: 01/14/2019 at 8:06 am
GuyM,

Much depends on what ROI is acceptable for an oil company, if they require a 15% ROI, then the average 2017 Permian Basin well (average cost full cycle assumed to be $9.5 million) needs $66/b at refinery gate ($62/b at wellhead) to meet that hurdle, EUR is about 411 kb.

Fernando L x Ignored says: 01/14/2019 at 4:08 pm
See how my old $63 per barrel model is not that bad after all? Right now it's a bit higher, about $70.

[Jan 14, 2019] Peak Oil Review 14 January 2019

Notable quotes:
"... The news that the Saudis will cut even more production than specified in their recent pledge in hopes of raising world prices to $80 a barrel was an important part of last week's price jump. Hopes that the US and China would settle their trade dispute during on-going talks was also an important factor in the recent price jump. ..."
"... While the US economy has been bumping along nicely in recent months, the same is not true for the other major centers of economic power – China and Europe. ..."
"... The Limits to Growth ..."
Jan 14, 2019 | mailchi.mp

Oil prices continued to climb last week and are now some $10 a barrel higher than they were just before Christmas when recent lows were set. Prices now have retraced about 30 percent of the $35 a barrel drop that took place between late September and late December. Part of the recent price correction likely is due to technical factors such as closing out long positions in the futures markets. The news that the Saudis will cut even more production than specified in their recent pledge in hopes of raising world prices to $80 a barrel was an important part of last week's price jump. Hopes that the US and China would settle their trade dispute during on-going talks was also an important factor in the recent price jump.

Looming over the talk about OPEC+ production cuts and how fast US shale oil production might grow are the prospects for the global economy. A major recession could drive the demand for oil so low that even current prices would be difficult to maintain. While there have always been people convinced that a major economic crash is in the offing, in recent weeks there has been a noticeable increase in the number and stridency of these predictions.

While the US economy has been bumping along nicely in recent months, the same is not true for the other major centers of economic power – China and Europe. The Washington Post headlines that "Economic growth is slowing all around the world," citing declines in the equity markets; sputtering German factories, and Chinese retail sales growing at their slowest pace in 15 years. Even Beijing is looking for its GDP to grow by 6-6.5 percent this year which is way off from the heady days of double digits ten years ago.

Eurozone economic forecasts fell last Monday again after a survey of economists found that GDP is expected to grow just below 1.6 percent this year, 0.4 percentage points lower than an already conservative estimate from March. A new report from the World Bank, citing a variety of data, including softening international trade and investment, ongoing trade tensions, and financial turmoil concludes that "the outlook for the global economy in 2019 has darkened."

Among the darker forecasts for the future are those that speculate on a global depression on the scale of the 1930s where GDPs fall by 10 to 25 percent. Others are saying that the global economy may be approaching " The Limits to Growth " as discussed in the famous 1972 book.

... ... ...

Virendra Chauhan of Energy Aspects told CNBC last week that "$50 oil is not a level at which US producers can generate cash flow and production growth, so we do expect a slowdown." In a Bloomberg radio interview John Kilduff, founding partner of Again Capital Management, said "we were getting into the zone where U.S. shale producers stop making money particularly when you sort of add in all the costs, not just the pure say drilling and extraction. It's going to start to get tough for them right now."

... ... ...

Iran : Iran's crude exports dropped to 1 million b/d in November from 2.5 million b/d in April, taking exports back to where they stood during the 2012-2016 sanctions. According to three companies that track Iranian exports, Tehran's crude shipments remained below 1 million b/d in December and are unlikely to exceed that level in January. Tracking

... ... ...

Iraq : Baghdad posted its highest monthly export total to date in December and, combined with Kurdistan, set a nationwide annual record of 4.15 million b/d -- more than 100,000 b/d above the previous record, set in December 2016. The government said on Friday it is committed to the OPEC+ output-cutting deal and would keep its oil production at 4.513 million b/d for the first half of 2019

... ... ...

Saudi Arabia : According to OPEC officials, Saudi Arabia is planning to cut crude exports to around 7.1 million b/d by the end of January in hopes of lifting oil prices above $80 a barrel.

... ... ...

Libya: Tripoli plans to pump 2.1 million b/d of crude oil by 2021 if the security situation improves, the chairman of the National Oil Corporation said last week. The plan would represent a doubling of the current rate of production, which currently stands at 953,000 b/d.

... ... ....

4. Russia

Moscow has already lowered its oil output by around 30,000 b/d compared with October volumes, which is used as the baseline under the latest OPEC/non-OPEC crude production agreement. Russian energy minister Novak said Friday: "We are gradually lowering output; our plan is that overall production in January will be 50,000 b/d less than in October."

[Jan 14, 2019] Norway's Oil Production To Fall To 30-Year Low

Notable quotes:
"... Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3 percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil production this year is forecast to drop by another 4.7 percent from last year to reach in 2019 its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show. ..."
"... However, the Norwegian oil regulator warned that "resource growth at this level is not sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is essential that more profitable resources are proven in the next few years." ..."
"... The industry's problem is that after Johan Sverdrup and Johan Castberg there haven't been major discoveries. ..."
Jan 14, 2019 | www.zerohedge.com

Norway's Oil Production To Fall To 30-Year Low

by Tyler Durden Mon, 01/14/2019 - 14:17 9 SHARES Authored by Tsvetana Paraskova via Oilprice.com,

Despite cost controls, increased efficiency, and higher activity offshore Norway, oil production at Western Europe's largest oil producer fell in 2018 compared to 2017 and is further expected to drop this year to its lowest level since 1988.

Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3 percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil production this year is forecast to drop by another 4.7 percent from last year to reach in 2019 its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show.

As bad as it sounds, this year's expected low production is not the worst news for the Norwegian Continental Shelf (NCS) going forward.

Oil production is expected to jump in 2020 through 2023, thanks to the start up in late 2019 of Johan Sverdrup -- the North Sea giant, as operator Equinor calls it. With expected resources of 2.1 billion -- 3.1 billion barrels of oil equivalent, Johan Sverdrup is one of the largest discoveries on the NCS ever made. It will be one of the most important industrial projects in Norway in the next 50 years, and at its peak, the project's production will account for 25 percent of Norway's total oil production, Equinor says.

The worst news for Norway's oil production, as things stand now, is that after Johan Sverdrup and after Johan Castberg in the Barents Sea scheduled for first oil in 2022, Norway doesn't have major oil discoveries and projects to sustain its oil production after the middle of the 2020s.

The NPD started warning last year that from the mid-2020s onward, production offshore Norway will start to decline "so making new and large discoveries quickly is necessary for maintaining production at the same level from the mid-2020s."

In the report this week, NPD Director General Bente Nyland said:

"The high level of exploration activity proves that the Norwegian Shelf is attractive. That is good news! However, resource growth at this level is not sufficient to maintain a high level of production after 2025. Therefore, more profitable resources must be proven, and the clock is ticking".

Norwegian oil production in 2018 was expected to drop compared to the previous year, but the decline "proved to be greater than expected," the NPD said, attributing part of the production fall to the fact that some of the newer fields are more complex than previously assumed, and certain other fields delivered below forecast, mainly because fewer wells were drilled than expected.

In October 2018, Germany's Wintershall warned that its Maria oil and gas field off Norway was not fully meeting expectations due to issues with water injection. Those issues haven't been solved yet, NPD's Nyland told Reuters this week.

Exploration activity in Norway considerably increased in 2018 compared to 2017, with 53 exploration wells spud, up by 17 wells compared to the previous year. Based on company plans, this year's exploration activity is expected to remain high and around the 2018 number of wells spud, the NPD says.

The key reasons for higher exploration activity have been reduced costs, higher oil prices lifting exploration profitability, and new and improved seismic data on large parts of the Shelf, the NPD noted.

However, the Norwegian oil regulator warned that "resource growth at this level is not sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is essential that more profitable resources are proven in the next few years."

Norway still holds a lot of oil under its Shelf, and those remaining resources could sustain its oil and gas production for decades to come. The industry's problem is that after Johan Sverdrup and Johan Castberg there haven't been major discoveries.

According to the NPD's resource estimate, nearly two-thirds of the undiscovered resources lie in the Barents Sea.

"Therefore, this area will be important for maintaining production over the longer term," the regulator said.

Operators on the NCS have made great efforts to try to make even smaller discoveries profitable by hooking them to existing platforms and production hubs. However, these smaller finds alone can't offset maturing production -- Norway needs major oil discoveries, and it needs them soon , considering that the lead time from discovery to production is several years.

[Jan 14, 2019] Chinese crude oil imports are up almost ten percent in one year

Jan 14, 2019 | peakoilbarrel.com

Energy News x Ignored says: 01/14/2019 at 6:22 am

Chinese crude oil imports up +9.9% higher in full year 2018 compared to FY 2017.
The month of December up +29.9% higher than Dec 2017

2019-01-14 OilyticsData
Another big crude import number from China (2nd consecutive month of imports above 10 MMB/D). Low oil prices and startup of mega refineries such as RongSheng and Hengli is helping to keep these numbers near record levels.(Source; GAC China)
Chart https://pbs.twimg.com/media/Dw3fk2GXcAUZ_Vu.jpg
Oilytics https://twitter.com/OilyticsData

[Jan 13, 2019] Did Trade Talks Impact Oil-Weighted Stocks More than Oil by Robert Scott

Notable quotes:
"... All of these oil-weighted stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF ( XOP ). They have production mixes of at least 60.0% in liquids based on their latest quarterly production data. Liquids include crude oil, condensates, and natural gas liquids. ..."
Jan 10, 2019 | marketrealist.com
Oil-weighted stocks

The following oil-weighted stocks could be the most sensitive to US crude oil's movements. They might be impacted the most by oil's price movement based on their correlations with US crude oil active futures in the trailing week:

image001

Impact of trade talks

In the trailing week, US crude oil active futures rose 12.5%. Occidental Petroleum was the third-largest gainer on our list of oil-weighted stocks. The top gainers, Callon Petroleum ( CPE ) and Whiting Petroleum ( WLL ) rose 30.5% and 20.6%, respectively, in the trailing week despite having a mild negative correlation with oil prices. The trade talks between the US and China might have caused these stocks to increase. In the previous part, we discussed that easing trade war concerns might be behind the rise in oil prices. ConocoPhillips had the highest correlation with oil. ConocoPhillips has risen 4.8% -- the lowest among our selected oil-weighted stocks.

All of these oil-weighted stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF ( XOP ). They have production mixes of at least 60.0% in liquids based on their latest quarterly production data. Liquids include crude oil, condensates, and natural gas liquids.

[Jan 13, 2019] Catherine Austin Fitts – Federal Government Running Secret Open Bailout

Highly recommended!
Questionable, but still interesting perspective. Ignore marketing crap -- clearly there is marketing push within this presentation -- she wants your subscriptions. "This is Main Street vs Wall Street" dichotomy sounds plausible. Neoliberalism is, in essence, is the restoration of power of financial oligarchy.
But the idea of secret open bailout might explain why shale oil became so prominent despite high cost of producing it: Wall Street was subsidised via backchannels for bringing price downand supporting shale companies by the US goverment
Jan 12, 2019 | www.youtube.com

$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore and Catherine Austin Fitts in 2017 has now become a national security issue. The federal government is not talking or answering questions, even though the DOD recently failed its first ever audit.

Fitts says, "This is basically an open running bailout. Under this structure, you can transfer assets out of the federal government into private ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You can't even know who is doing it. I'm telling you they just took the United States government, they just changed the governance model by accounting policy to a fascist government. If you are an investor, you don't know who owns those assets, and there is no evidence that you do. . . . If the law says you have to produce audited financial statements and you refuse to do so for 20 years, and then when somebody calls you on it, you proceed to change the accounting laws that say you can now run secret books for all the agencies and over 100 related entities."

In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected President. The President cannot fix this. We need to fix this. . . . This is Main Street versus Wall Street. This is honest books versus dirty books. If you want the United States in 10 years to resemble anything what it looked like 20 years ago, you are going to have to do it, and there is no one else who can do it. You have to first get the intelligence to know what is happening."

Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report." Donations: https://usawatchdog.com/donations/

Stay in contact with USAWatchdog.com: https://usawatchdog.com/join/

All links can be found on USAWatchdog.com: https://usawatchdog.com/secret-money-...

Bob T 20 hours ago

Greg, with all due respect I don't you understand what CAF is saying. Forget about a dollar reset. The fascists, using the Treasury, Exchange Stabilization Fund, HUD, DOD and any agency they choose, have turned the US government into a gigantic money laundering operation. And they maintain two sets of books - the public numbers are a complete sham. Any paper assets held by private citizens are not secure, are likely rehypothecated, and when convenient can be frozen or siezed by these fascists in Washington. There is no limit to how many dollars the FED can create secretly and funnel out through the ESF/Treasury to prop up and bail out any bank, black ops, pet project, mercenary army or paper assets they choose. The missing $21 trillion is probably a drop in the bucket as there is no audit and no honest books for us to examine. In sum, all paper asset pricing in dollars is a fraud and a sham. Any paper assets you think you own, whether it be stocks, bonds, or real estate are pure illusion: they can be repriced or stolen at any time; in reality, you own nothing. To the man and woman on the street I say this: get out of paper, get out of these markets and convert to tangibles in your physical possession - and do it secretly and privately, avoid insurances, records, paper trails. This mass defrauding of the American people by this corrupt government in Washington will come crashing down when the US dollar is displaced from reserve status; this is what China and Russia and the BRICS are setting the stage for: world trade without the US dollar. When this happens, your dollars will become virtual toilet paper and all of your paper assets will go poof.

D Loydel 18 hours ago (edited)

"We have to fix this". Ok how does the individual fix this? Private armies are running around doing whatever private armies do and I, the one man, is suppose to fix this. Please, will someone tell us what we are suppose to do, specific instructions not a mix of large words that say " we must fix this", damn, we need a leader. Greg you ask almost every person you interview what the middle class should be doing to protect themselves and you never get a "real" answer, just a dance around. Also you ask numerous people what this coming change is going to look like and again, just silence or dance music, no answers. Damn we need a leader. Your trying very hard to give us information that will help us weather the coming storm, so thank you for all you do, and you do more than anyone else out there.

Forrest Byers 19 hours ago

Question, why in part do I feel I am being lied to? Is it subscription hustle or is it, don't you believe your lying eyes!

Without knowing exactly what is what, anyone who would've watched Herbert Walker Bush's funeral with reactions from those who received cards, whether they be Bush family, the Clintons, the Obamas and entourage. Jeb Bush went from being proud and patriotic to panic like the funeral that he was at was for the whole family.

Joe Biden looked like he had a major personal accident and no way to get to the bathroom for cleanup.

George W. Bush after being asked a question, of which the answer was, "Yep" then proceeded to appear resigned and stoic! What ever was on those cards essentially amounted to, for all those receiving a card, "the gig is up" and it appears they all damn well knew it.

So, Catherine Austin Fitts, explain your, "Trump is colluding with the Bushies," I would say, that Canary in this mine of inquiry is dead. I'm just an old disabled Vietnam vet of plebeian background and certainly not a revolving door Washington DC Beltway patrician, so any explanation needs to be delivered in slow, logical step-by-step progression for I have not mastered the art of selling the sizzle in hopes that the dupes will later pay for the steak. I prefer, Greg, when you actually get more combative with Ms. Fitts. Make America, great again and do so, in the name of the Lord Jesus Christ, Amen.

sell siliconvalley 19 hours ago

35 min: Fitts gives a great synopsis of the problem. She never deviates in all of her interviews. greg doesn't seem to understand at all. She repeats herself MULTIPLE TIMES and greg is still asking the same irrelevant PREPPER questions. IT DOES NOT MATTER WHAT ASSETS YOU HOLD GREG, AND THAT INCLUDES GOLD!!!! WHEN YOU'RE EXISTING IN A TYRANNICAL SYSTEM THAT STEALS AT WILL FROM ITS' CONSTITUENCY YOU CAN'T actually OWN ANYTHING!!!! lord! only so many ways to say

Andy Mak 17 hours ago

She lost credibility when she said Trump has "made a deal with the Bushes." That defies logic. The Bushes made a deal with Trump! Trump has gained full control of the military with a $ 1 1/2 trillion war chest. Trump and Putin are putting the China toothpaste back in the tube.

Karen Lydon 19 hours ago

This woman clearly knows nothing about the plan..she has not even mentioned that the world bank president has resigned who was appointed by obumma. And that is HUGE. She was in government in the corruption, but she doesn't know how things will be fixed..she's not in that loop of current things in the new reset..shes coming from her own perceptions

A T 20 hours ago

This woman always make me sick to my stomach. She comes out and says a bunch of scary stuff and offers no solution. If it's too much for just one person, then we the people need to take control. We don't need a central bank. We need local and state banks like the Bank of North Dakota then we can migrate over to them and then shut down the Fed.

[Jan 13, 2019] Mismatch of the USA refining capacities and the supply of oil in the market

Jan 13, 2019 | peakoilbarrel.com

Energy News x Ignored says: 01/12/2019 at 2:24 pm

2019-01-11 (Bloomberg) Saudi and Canadian cuts are leaving world hungry for heavy crude
Refiners along the Gulf Coast and in the Midwest invested billions of dollars in cokers and other heavy-oil processing units over the past three decades anticipating supplies of light oil would become scarce while heavy crude from Canada's oil sands, Venezuela and Mexico would grow. Instead, the opposite occurred.
The shale revolution, as well as new offshore supplies form Brazil and West Africa, caused a surge of light oil, while supplies from Venezuela to Mexico declined. Canada's growth has been stymied by delays in getting new pipelines built.
https://www.bnnbloomberg.ca/saudi-and-canadian-cuts-are-leaving-world-hungry-for-heavy-crude-1.1197259

[Jan 13, 2019] Indian consumption continues to grow

Jan 13, 2019 | peakoilbarrel.com

Energy News

x Ignored says: 01/11/2019 at 7:57 am
India – Consumption of Petroleum Products (Without LPG or PetCoke)(kt/day)
December 2018 up +7.01% higher than December 2017
Average full year 2018 up +6.80% higher than full year 2017
Chart https://pbs.twimg.com/media/DwoYp5xWsAA_vRh.jpg
India Light Distillates Consumption (shown in chart)
Average full year 2018 up +9.74% higher than full year 2017
Chart https://pbs.twimg.com/media/DwoY_yjX4AA-S9K.jpg
India Middle Distillates Consumption
Average full year 2018 up +3.92% higher than full year 2017
Energy News x Ignored says: 01/11/2019 at 3:51 pm
The increase in barrels is +220 kb/day year/year (without LPG or Petcoke)

2019-01-11 (Bloomberg) The International Energy Agency, which expects the country to be the fastest-growing oil consumer through 2040, cut its 2018 demand forecast for India at least two times. The agency estimated India's oil demand growth at 245,000 bpd in 2018 and 235,000 bpd in 2019.
https://www.worldoil.com/news/2019/1/11/india-oil-demand-rises-from-four-year-low-as-cash-ban-impact-fades

[Jan 13, 2019] UAE energy minister says average oil price in 2018 was $70 a barrel

Jan 13, 2019 | finance.yahoo.com

ABU DHABI (Reuters) - United Arab Emirates Energy Minister Suhail al-Mazrouei said on Saturday the average oil price in 2018 was $70 a barrel.

The Organization of the Petroleum Exporting Countries and other leading global oil producers led by Russia agreed in December to cut their combined oil output by 1.2 million barrels per day to balance the oil market starting from January.

"Today we look at an average year of around $70 for Brent," Mazrouei told an industry news conference in Abu Dhabi, adding that this level would help encourage global oil investments. An energy ministry spokesman said the minister was referring to the average oil price in 2018.

[Jan 13, 2019] WTI needs to be closer to $70 barrel induce interest in additional capital spedings.

Jan 13, 2019 | peakoilbarrel.com

GuyM

x Ignored says: 01/12/2019 at 2:09 pm
http://energyfuse.org/u-s-shale-taps-brakes-with-wti-below-50/

Same source of info which is the Dallas Fed. Only, this one discusses costs more. As, was discussed here, previously, WTI needs to be closer to $70 barrel to induce interest.

[Jan 13, 2019] Canada's Crude Oil Production Cuts Are Unsustainable by Haley Zaremba

I especially like the phase "This directive was particularly surprising in the context of Canada's free market economy" That's really deep understanding of the situation ;-) . It is so difficult to understand that Canada as a large oil producer, needs higher oil prices and it does not make sense from the point of market economy to pollute the environment and at the same time lose money in the process ?
Notable quotes:
"... Alberta's oil production has been cut 8.7 percent according to the mandate set by the province's government under Rachel Notley with the objective of cutting out around 325,000 barrels per day from the Canadian market. ..."
"... So far, the government-imposed productive caps have been extremely successful. In October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian Select (WCS) was trading at a whopping $50 per barrel less than United States benchmark oil West Texas Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has diminished by a dramatic margin to a difference of just under $13 per barrel. ..."
"... The current production caps in Canada are only intended to last through the middle of this year, at which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000 barrels per day fewer than the numbers from November 2018's production rates. ..."
Jan 13, 2019 | finance.yahoo.com

In an attempt to combat a ballooning oil glut and dramatically plummeting prices, the premier of Alberta Rachel Notley introduced an unprecedented measure at the beginning of December when she is mandating that oil companies in her province cut production. This directive was particularly surprising in the context of Canada's free market economy, where oil production is rarely so directly regulated.

Canada's recent oil glut woes are not due to a lack of demand, but rather a severe lack of pipeline infrastructure. There is plenty of demand, and more than enough supply, but no way to get the oil flowing where it needs to go. Canada's pipelines are running at maximum capacity, storage facilities are filled to bursting, and the pipeline bottleneck has only continued to worsen . Now, in an effort to alleviate the struggling industry, Alberta's oil production has been cut 8.7 percent according to the mandate set by the province's government under Rachel Notley with the objective of cutting out around 325,000 barrels per day from the Canadian market.

Even before the government stepped in, some private oil companies had already self-imposed production caps in order to combat the ever-expanding glut and bottomed-out oil prices. Cenovus Energy, Canadian Natural Resource, Devon Energy, Athabasca Oil, and others announced curtailments that totaled around 140,000 barrels a day and Cenovus Energy, one of Canada's major producers, even went so far as to plead with the government to impose production caps late last year.

So far, the government-imposed productive caps have been extremely successful. In October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian Select (WCS) was trading at a whopping $50 per barrel less than United States benchmark oil West Texas Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has diminished by a dramatic margin to a difference of just under $13 per barrel.

Related: The Natural Gas Crash Isn't Over

While on the surface this would seem to be a roundly glowing review of the production caps in Alberta, production cuts are not a long-term solution for Canada's oil glut woes. The current production caps in Canada are only intended to last through the middle of this year, at which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000 barrels per day fewer than the numbers from November 2018's production rates. The cuts are a just a treatment, not a cure, for oversupply in Alberta. The problem needs to be addressed at its source--the pipelines.

Unfortunately, the pipeline shortage in Alberta has no quick and easy fix. While there are multiple major pipeline projects underway, the two largest, the Keystone XL pipeline and the Trans Mountain pipeline, are stalled indefinitely thanks to legal woes and seemingly endless litigation. The Enbridge Line 3 pipeline, intended to replace one of the region's already existing pipelines, is currently under construction and projected to be up and running by the end of the year, but will not go a long way toward fixing the bottleneck.

Even if the Albertan government re-evaluates the present mid-2019 expiration date for the current stricter production cuts, extending the production caps could have enduring negative consequences in the region's oil industry. Keeping a long-term cap on production in Alberta would potentially discourage investment in future production as well as in the infrastructure the local industry so sorely needs. According to some reporting , the cuts will not be able to control the gap between Canadian and U.S. oil for much longer anyway, just another downside to drawing out what should be a short-term solution. The government will need to weigh the possible outcomes very carefully as the expiration date approaches, when the and the pipeline shortage is still a long way from being solved and the price of oil remains dangerously variable.

By Haley Zaremba for Oilprice.com

[Jan 11, 2019] The Winners and Losers of Big Oil s Offshore Spending Revival - Bloomberg

Offshore oil and specially deep water oil is the most expensive oil. So increase in offshore project means that producers expect $80 oil or higher.
Jan 11, 2019 | www.bloomberg.com

Offshore oilfield service purchases by type

https://www.bloomberg.com/toaster/v2/charts/f4ceb132341a480388bae94ca3293dfe.html?brand=markets&webTheme=markets&web=true&hideTitles=true

Source: Rystad Energy DCube

Notwithstanding recent oil-price volatility , spending on offshore oilfield services will rise by 6 percent in 2019 reaching $208 billion, before surging by another 14 percent in 2020, according to Norwegian consultancy Rystad Energy AS . That's after almost halving since 2014.

[Jan 07, 2019] Saudi Oil Production Cuts May Stoke Oil Prices, Spur Trump Tweets by Julian Lee

All graphics and images removed...
Notable quotes:
"... It makes sense for Saudi Arabia to focus its cuts on sales to the U.S., the only country that publishes detailed weekly data on oil imports and inventory levels -- traders watch the reports closely. This means the reductions will be evident more quickly than would similar cuts to other destinations, so a drop in American imports should have a much more immediate impact on price expectations. ..."
www.marketwatch.com

There's already less Saudi crude oil getting loaded for export.

The list of things that President Donald Trump criticizes in his tweets varies from one day to the next. He may soon have to direct his ire to oil prices and the actions of his ally, Saudi Arabia, once again.

The desert kingdom is already making good on its promise to slash supply, and the initial evidence suggests that the biggest cut is being made in deliveries to the U.S. On top of that, the price it charges American buyers of its crude has been raised to near record levels for cargoes to be shipped in February. That could be bad news for a president who just celebrated falling gas prices.

The OPEC+ group of countries met in December and, after Russia took the reins , eventually agreed to cut supplies by 1.2 million barrels a day from January. For Saudi Arabia, that meant cutting production to just over 10.3 million, but it pledged to go further -- oil minister Khalid Al-Falih told reporters and analysts that it would be slashed to 10.2 million barrels a day in January.

The first job was to unwind the output surge made in November that had helped to deliver the price drop hailed by Trump. That was done last month. Saudi production in December was back below the October baseline used for its (and most other countries') promised cuts.

Saudi Cuts

Saudi crude production was cut to 10.65 million barrels a day in December from a record 11.07 million in November

That couldn't have been what Trump wanted, given what he tweeted the day before OPEC began its meeting in Vienna -- at the time, crude prices were in the midst of their worst quarterly decline in four years.

Bloomberg's tracking of crude exports from Saudi Arabia indicates that the biggest drop in flows from the kingdom was in the volume heading for the U.S. Shipments to ports on the Atlantic, Gulf and West coasts fell by nearly 60 percent between November and December to just over 350,000 barrels a day. That's the lowest since Bloomberg started tracking these flows in January 2017.

Cutting Shipments

The flow of Saudi crude heading to the U.S. slumped last month, as the kingdom slashed output

The size of the drop isn't set in stone -- a small number of ships signaling that they are heading for the Suez Canal or Singapore could eventually go to the U.S. Even so, a decline in Saudi crude shipments to American ports should start to show up in lower deliveries after about six weeks. By mid-February, U.S. imports of the kingdom's oil could fall to the lowest in more than 30 years, according to data from the Department of Energy. The last time the flow from Saudi to the U.S. fell below half a million barrels a day was in the mid-1980s, after the kingdom slashed its production by 80 percent over four years in an ultimately unsuccessful attempt to prop up oil prices.

Slowing The Flow

Imports of Saudi crude into the U.S. could soon fall to their lowest in more than 30 years

It's not just this volume decline that is going to rile Trump. The price of that oil isn't going to make him happy either.

Saudi Arabia sets its crude prices a month in advance of it being loaded at its export terminals, so it has just published its price list for February. In common with other producers, it does not set an outright price, but rather a differential to regional benchmarks for each export grade and each market area.

Price differentials for U.S. buyers have been going up since August and for most grades are now close to record levels. Saudi heavy crude, which is the closest alternative to dwindling supplies from Venezuela and Mexico, is the most expensive it's been since 2009 in relative terms.

Price Rises

Saudi crude prices for U.S. buyers have risen to near record levels against the regional benchmark

It makes sense for Saudi Arabia to focus its cuts on sales to the U.S., the only country that publishes detailed weekly data on oil imports and inventory levels -- traders watch the reports closely. This means the reductions will be evident more quickly than would similar cuts to other destinations, so a drop in American imports should have a much more immediate impact on price expectations.

There is no reason to doubt that Al-Falih will do what he said in Vienna. It was only after slashing exports to the U.S. in July 2017 that oil prices really began to recover, and Saudi Arabia will be hoping for a similar impact this time, too. But don't be surprised if that also unleashes angry tweets from the U.S. president.

Julian Lee is an oil strategist for Bloomberg First Word. Previously he worked as a senior analyst at the Centre for Global Energy Studies.

[Jan 06, 2019] Those who manipulate the oil market down will only make it more volatile in the future

Notable quotes:
"... The EIA weekly reports are a joke with zero movements for crude inventory for last 2 weeks. And an adjustment factor that nobody understands. Maybe the government shutdown has some influence after all. ..."
Jan 06, 2019 | peakoilbarrel.com

kolbeinh x Ignored says: 01/04/2019 at 11:42 am

It is all a big illusion that oil is cheap like water in my opinion. To manipulate the market down will only make for more volatility in the future, and it is a good a bet as when the oil price fell to 30 dollars/b in 2016 that prices will eventually rise again from this level.

It has do with that the tanking of oil prices is out of the usual cycle in the industry (low investments makes for less oil after 3+ years).

I have started to bet on oil prices going up again even more for the fun of it (a few bets made too early I have to admit) and now I put some meaningful amount of money in it; to make it even more fun hopefully.

The EIA weekly reports are a joke with zero movements for crude inventory for last 2 weeks. And an adjustment factor that nobody understands. Maybe the government shutdown has some influence after all.

To build a wall against the tide water is an illustration of how successful it will be to keep the oil prices down with illusional data alone. And I stand by that a recession based on "fear" news alone is fake, but can of course in the end become a self fulfilling prophecy.

And [there is] the real fear is inflation based on too high oil prices. Extensive tariffs to hinder trade will also never help prosperity, but it remains to be seen if threats are made real or if the policy at some point will be revoked.

The story is to be continued

[Jan 04, 2019] Effect of "paper oil". You won't know anything until you find yourself sitting in a line waiting for gasoline. You won't see it coming. You won't predict it. It will just happen someday.

Jan 04, 2019 | peakoilbarrel.com

Watcher: 01/02/2019 at 3:32 pm

You guys insist on continuing to think money isn't created from thin air by the Fed and actually means something in the context of a substance that feeds you food. If you have to have it, and you do have to have it, things will be done for you to get it. Borrowed money that was created from thin air . . . who cares if you can't pay it back? You have to eat.

Consumption of oil is up. OPEC and Russia have reduced output. The price falls, because there is no meaning to anything created from thin air when applied to something that depends on physics.

You won't know anything until you find yourself sitting in a line waiting for gasoline. You won't see it coming. You won't predict it. It will just happen someday.

Soon.

GuyM: 01/02/2019 at 4:27 pm
Some truth to that Watcher. Simplistic thinking in investors. If we aren't making much money, the US won't be making much money, so the price of oil must go lower. Not just simplistic, flat out stupid.

And the number of people who think oil supply is limited is fairly scarce in relation to the population as a whole. Probably less than the number of people who think chocolate milk comes from brown cows.

[Jan 04, 2019] $70 Oil Could Be Right Around The Corner

Jan 04, 2019 | oilprice.com

On Friday, Bloomberg said that many of the world's largest banks are forecasting a rebound in oil prices next year as fears of a recession prove misplaced.

According to a Bloomberg survey of oil analysts, Brent will average $70 a barrel in 2019, almost a third higher than its price on Thursday. Michael Cohen, head of energy and commodities research at Barclays Plc in New York, said "we could even see something similar to a V-shaped recovery next year, on two very important conditions. One, that the reduction in OPEC exports leads to a reduction in inventories. And two, that we don't see a further deterioration in macroeconomic conditions."

The Bloomberg report added that despite a recent darkening outlook for the global economy amid prolonged trade disputes between the U.S. and China, and as the U.S. Federal Reserve embarks on tightening monetary policy, most commentators aren't seeing an actual recession biting the oil market next year. The median forecast of 24 oil analysts in the Bloomberg survey projects that Brent crude futures will average exactly $70 a barrel in 2019. The price on Thursday was about $53.50 while the average so far in 2018 has been about $72. Meanwhile, the median forecast for WTI is $61.13. WTI futures traded at about $45.27 on Monday.

[Jan 04, 2019] Shale still vulnerable if OPEC gets nasty

Jan 04, 2019 | finance.yahoo.com

America is now the largest producer of oil in the world. For the U.S., this is great news as the dream of energy independence grows and maybe one day we can tell OPEC to go take a hike.

However, while the shale oil revolution has helped change the energy landscape forever, we cannot take shale for granted. We can't just assume that the industry can withstand any price and that production can keep rising despite the market conditions. We can't assume that shale oil producers can match OPEC production cuts barrel for barrel.

We also can't assume OPEC, weakened by falling prices of late, won't strike back like they did in 2014. That's when OPEC declared a production war on U.S. shale producers. The then de facto head of the OPEC Cartel Ali al-Naimi spoke about market share rivalry with the United States and said that they wanted a battle with the U.S. There were no winners in that production war. Ali al-Naimi was sacked as he almost bankrupted Saudi Arabia. It took its toll on U.S. producers as well, as many were forced into bankruptcy despite making significant progress on efficiency and cost cutting.

CLICK HERE TO GET THE FOX BUSINESS APP

With 2019 underway, OPEC, along with Russia, agreed to remove 1.2 million barrels per day off the market for the first six months of the year. Early reports on OPEC compliance to the agreed upon production cuts is overwhelming at a time when there are new questions about how shale oil producers are faring after this recent oil price drop.

Private forecasters are showing that there are major cuts in Saudi exports and even signs that OPEC production is falling sharply. Bloomberg News confirmed that by reporting "observed crude exports from Saudi Arabia fell to 7.253 million barrels per day in December on lower flows to the U.S. and China." Furthermore, other private trackers believe that the drop may be the biggest in exports since Bloomberg began tracking shipments in early 2017. Oil saw another boost after Bloomberg reported that OPEC oil production had the biggest monthly drop in two years falling by 530,000 barrels a day to 32.6 million a day last month. It's the sharpest pullback since January 2017.

Rewind to 2017, there was talk that shale oil producers would make up the difference and the cut would not matter, but that was proven wrong. This time expect the same because it is likely that shale oil producers may have to cut back as the sharp price drop has put them in a bad position. The Wall Street Journal pointed out that, even now, some shale oil wells are not producing as much oil as expected. This coupled with a large declining production rate in shale swells means that they need capital to keep drilling to keep those record production numbers moving higher. "Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota. Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions" the Journal reported.

"While U.S. output rose to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal's findings suggest current production levels may be hard to sustain without greater spending, because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October."

Of course, none of this matters if we see a prolonged slowdown in the global economy, Demand may indeed turn out to be the great equalizer. Yet if growth comes back, say if we get a China trade deal or if they ever reopen the U.S. government, we will most likely see a very tight market in the new year. The OPEC cuts will lead to a big drawdown in supply and shale oil producers will find it hard to match OPEC and demand growth barrel for barrel.

[Jan 03, 2019] Oil drops on concerns of economic downturn, but OPEC cuts support by Henning Gloystein

Jan 03, 2019 | finance.yahoo.com

OPEC oil supply fell by 460,000 barrels per day (bpd) between November and December, to 32.68 million bpd, a Reuters survey found on Thursday, as top exporter Saudi Arabia made an early start to a supply-limiting accord, while Iran and Libya posted involuntary declines.

OPEC, Russia and other non-members - an alliance known as OPEC+ - agreed last December to reduce supply by 1.2 million bpd in 2019 versus October 2018 levels. OPEC's share of that cut is 800,000 bpd.

"If OPEC is faithful to its agreed output cut together with non-OPEC partners, it would take 3-4 months to mop up the excess inventories," energy consultancy FGE said.

[Jan 02, 2019] The demonization of Russia, China, Iran and Venezuela might be connected with oil depletion

Notable quotes:
"... Ever since US Crude Oil peaked its production in 1970, the US has known that at some point the oil majors would have their profitability damaged, "assets" downgraded, and borrowing capacity destroyed. At this point their shares would become worthless and they would become bankrupt. The contagion from this would spread to transport businesses, plastics manufacture, herbicides and pesticide production and a total collapse of Industrial Civilisation. ..."
Jan 02, 2019 | www.moonofalabama.org

Palloy , Feb 20, 2018 8:52:02 PM | link

@4 "For the life of me I cannot figure why Americans want a war/conflict with Russia."

Ever since US Crude Oil peaked its production in 1970, the US has known that at some point the oil majors would have their profitability damaged, "assets" downgraded, and borrowing capacity destroyed. At this point their shares would become worthless and they would become bankrupt. The contagion from this would spread to transport businesses, plastics manufacture, herbicides and pesticide production and a total collapse of Industrial Civilisation.

In anticipation of increasing Crude Oil imports, Nixon stopped the convertibility of Dollars into Gold, thus making the Dollar entirely fiat, allowing them to print as much of the currency as they needed.

They also began a system of obscuring oil production data, involving the DoE's EIA and the OECD's IEA, by inventing an ever-increasing category of Undiscovered Oilfields in their predictions, and combining Crude Oil and Condensate (from gas fields) into one category (C+C) as if they were the same thing. As well the support of the ethanol-from-corn industry began, even though it was uneconomic. The Global Warming problem had to be debunked, despite its sound scientific basis. Energy-intensive manufacturing work was off-shored to cheap labour+energy countries, and Just-in-Time delivery systems were honed.

In 2004 the price of Crude Oil rose from $28 /barrel up to $143 /b in mid-2008. This demonstrated that there is a limit to how much business can pay for oil (around $100 /b). Fracking became marginally economic at these prices, but the frackers never made a profit as over-production meant prices fell to about $60 /b. The Government encourages this destructive industry despite the fact it doesn't make any money, because the alternative is the end of Industrial Civilisation.

Eventually though, there must come a time when there is not enough oil to power all the cars and trucks, bulldozers, farm tractors, airplanes and ships, as well as manufacture all the wind turbines and solar panels and electric vehicles, as well as the upgraded transmission grid. At that point, the game will be up, and it will be time for WW3. So we need to line up some really big enemies, and develop lots of reasons to hate them.

Thus you see the demonisation of Russia, China, Iran and Venezuela for reasons that don't make sense from a normal perspective.

Ger , Feb 21, 2018 7:52:44 AM | link
Dan @ 4

It is partially tied direct to the economy of the warmongers as trillions of dollars of new cold war slop is laying on the ground awaiting the MICC hogs. American hegemony is primarily about stealing the natural resources of helpless countries. Now in control of all the weak ones, it is time to move to the really big prize: The massive resources of Russia. They (US and their European Lackeys) thought this was a slam dunk when Yeltsin, in his drunken stupors, was literally giving Russia to invading capitalist. Enter Putin, stopped the looting .........connect the dots.

[Dec 29, 2018] Why Russia Isn't Worried About Lower Oil Prices

The big unknown is whether the USA entering the recession or not?
Dec 29, 2018 | oilprice.com

Russia is not as desperate for higher oil prices as is Saudi Arabia. There are a few reasons for this. One of the key reasons is that the Russian currency is flexible, so it weakens when oil prices fall. That cushions the blow during a downturn, allowing Russian oil companies to pay expenses in weaker rubles while still taking in U.S. dollars for oil sales. Second, tax payments for Russian oil companies are structured in such a way that their tax burden is lighter with lower oil prices.

Saudi Arabia needs oil prices at roughly $84 per barrel for its budget to breakeven.

... ... ...

Igor Sechin, the head of Russia's state-owned Rosneft, said that oil prices "should have stabilized, because everyone was supposed to be scared" by the enormous OPEC+ production cuts. "But nobody was scared," he said, according to Bloomberg. He blamed the Federal Reserve's rate tightening for injecting volatility into the oil market, because traders have sold off speculative positions in the face of higher interest rates.

...

Novak offered the market some assurances that the OPEC+ coalition would step in to stabilize the market if the situation deteriorates, suggesting that OPEC+ has the ability to call an extraordinary meeting. He told reporters on Thursday that the market still faces a lot of unknowns. "All these uncertainties, which are now on the market: how China will behave, how India will behave... trade wars and unpredictability on the part of the U.S. administration... those are defining factors for price volatility," Novak said.

Nevertheless, Novak predicted the 1.2 mb/d cuts announced in Vienna would be sufficient.

Some analysts echo Novak's sentiment that, despite the current panic in the market, the cuts should be sufficient. "We are looking at oil prices heading towards $70 to $80 quite a recovery in 2019. That's really predicated on the thought that first of all, OPEC still is here. And I think that the market is underestimating that they are going to cut supply by 1.2 mb/d," Dominic Schnider of UBS Wealth Management told CNBC . "And demand looks healthy so we might find ourselves into 2019 in a situation where the market is actually tight."

[Dec 28, 2018] Oil Bulls Cap Wackiest Year-End in Decade With Bet on 2019 Rally by Jessica Summers

Dec 28, 2018 | www.bloomberg.com

Hedge funds are keeping their cool in the most tumultuous end of the year for oil since the 2008 financial crisis, betting on better days ahead.

They boosted wagers on rising Brent prices for a third straight week amid expectations that OPEC and allies will follow through on a deal to reduce output. The vote of confidence comes against a backdrop of turmoil in financial markets that saw one measure of oil-price volatility jump the most on record in November and head for its highest year-end level in a decade.

"There is a little more optimism and neutrality coming into markets and we're getting some positive signs," said Ashley Petersen, an oil analyst at Stratas Advisors LLC in New York. "It's not as if demand is tanking tomorrow and supply is going to triple. We're seeing a little more rationale enter markets, a little more of a wait-and-see mode."

Although the global crude benchmark has declined about 15 percent since OPEC and its allies came together and announced an agreement to reduce output on Dec. 7 -- extending its plunge since early October to 40 percent -- producers have signaled dedication to the deal.

OPEC and its allies aim to publish a statement in January on the implementation of the agreement to cut production, according to Russia's Energy Minister Alexander Novak. He also said the market may see the impact of the cuts in January or February, and if necessary, the group can convene before its scheduled meeting in April. At the same time, a decline in Iranian imports to Japan adds another positive sign .

Hedge funds' net-long position -- the difference between bets on higher Brent prices and wagers on a drop -- rose 6.7 percent to 162,249 contracts for the six days ended Dec. 24, ICE Futures Europe data show. Longs rose, while shorts declined to the lowest level since late November. The report was for a period shorter than a week because of the Christmas holiday.

Analysts surveyed by Bloomberg forecast Brent to average $70 a barrel in 2019 as the market tightens, OPEC's supply cuts take effect and unintended losses in Venezuela and Iran increase.

So far, the apparent confidence from hedge funds and analysts hasn't yet translated into a calmer market. After surging a record 86 percent in November, the Chicago Board Options Exchange Oil Volatility Index ended Friday at 53.11. The last time it finished the year above 51 was 2008.

In the U.S., the Commodity Futures Trading Commission's commitments of traders report with a tally of wagers on West Texas Intermediate and other assets won't be published during the government shutdown, according to a Dec. 22 notice.

[Dec 22, 2018] WTI prices might average $60 a barrel and Brent $66 in 2019.

Dec 22, 2018 | peakoilbarrel.com

Dennis Coyne x Ignored says: 12/21/2018 at 11:45 am

https://www.marketwatch.com/story/oversold-oil-market-will-give-way-to-gains-in-2019-experts-predict-2018-12-20

Overall, oil prices will continue to "be difficult to predict," said Youngberg. "2019 will be volatile just as 2018 was."

Even so, he still offered some predictions for next year. He sees WTI prices averaging $60 a barrel and global benchmark Brent averaging $66 in 2019. That would mark increases of roughly 30% for WTI and 20% for Brent from Thursday's levels.

GuyM x Ignored says: 12/21/2018 at 2:26 pm
US stocks are decreasing at a slow time of year at about 2% a month. US will have minimal growth in 2019, in all likelihood at current or even at $60 due the current low price. OPEC plus is up to about a 1.5 million cut, so even at zero growth inventories will go away. So, an equilibrium is assured 🤡 damn, I ran out of fingers and toes, I hope that is right.

[Dec 22, 2018] Considering $46 a barrel price, which shale play is going to contribute to a 600k barrel increase next year?

Dec 22, 2018 | peakoilbarrel.com

GuyM x Ignored says: 12/19/2018 at 2:10 pm

Know it's not fair to ask with the recent price drop, but considering $46 a barrel price, which shale play is going to contribute to a 600k barrel increase next year 🤡
GuyM x Ignored says: 12/19/2018 at 3:20 pm
By my logic, prices should be substantially higher, already. But, there is NO current discussion which I believes touches on reality. Oil companies have to feel the same way. Hence, my expectation of reduced capex through the first half. But, that's using logic over future actions, which is a losing proposition. Oil prices will be volatile, and discussions over supply/demand will be far from reality. That's a pretty good guess.

[Dec 22, 2018] The algos have been in charge of the oil market for awhile. Wouldn't surprise me if we challenge 2016 low, if for no other reason than short to medium term oil prices near little relation to the physical market.

Dec 22, 2018 | peakoilbarrel.com

Watcher

x Ignored says: 12/18/2018 at 10:56 pm So what are people going to say if the price goes low $40s, production increases and companies post losses? And then the next year exactly the same thing happens. And the next. Reply

GuyM x Ignored says: 12/18/2018 at 11:03 pm

Er, "that's a lot of bankruptcies"?
Energy News x Ignored says: 12/19/2018 at 6:00 am
Yes I don't believe chapter 11 bankruptcies stopped much production in 2016, will have to wait and see if higher rates and a weaker junk bond market do anything

$WTI-Midland at 38.99
Bloomberg chart: https://pbs.twimg.com/media/DuwquiPXcAAQfL5.jpg

shallow sand x Ignored says: 12/19/2018 at 6:33 am
EN.

Look at the EIA field crude production page, which I assume for 2015, 2016 and 2017 is now fairly accurate.

Production dropped more than 1.1 million BOPD from the 2015 peak.

The Permian frenzy appears to have been the primary driver of growth since, with US production up 3 million BOPD from 9/15-9/18.

The price unfortunately needs to drop another $10 or so and stay there for awhile, as many are hedged on a percentage of barrels in the Permian and I assume there is still quite a bit of acreage that is not HBP.

I wound up owning FANG when it bought EGN. It is down $48 pretty quickly, and has been considered one of the best independents in the Permian. I have heard claims they are profitable in the $20s so I guess maybe we will find out.

The algos have been in charge of the oil market for awhile. Wouldn't surprise me if we challenge 2016 low, if for no other reason than short to medium term oil prices near little relation to the physical market.

Eulenspiegel x Ignored says: 12/19/2018 at 7:11 am
When they're profitable in the 20s, they should have now tons of cash and dividends. At the 60$ WTI they should have made much more than 50% earning from total revenue, and should be able to finance whole 2019 drilling program from cash they already earned.

Otherwise, they lied.

GuyM x Ignored says: 12/20/2018 at 8:42 am
I really can't fathom being profitable at $20.

[Dec 22, 2018] 2019 Will Be A Wild Year For Oil: Perhaps the largest pricing risk, and one of the hardest to predict, is the possibility of an economic downturn by Nick Cunningham

Dec 22, 2018 | oilprice.com

Bearish supply-side factors

Economic downturn . Perhaps the largest pricing risk, and one of the hardest to predict, is the possibility of an economic downturn . The global economy has already thrown up some red flags, with slowing growth in China, contracting GDP in parts of Europe, currency crises in emerging markets and financial volatility around the world. The tightening of interest rates looms large in many of these problems. "Alarm bells are starting to ring. Demand growth has been a pillar of strength for the oil market since prices fell and has exceeded 1 million b/d every year since 2012," WoodMac's Simon Flowers wrote. "We forecast 1.1 million b/d in 2019, but the trend is at risk." The U.S.-China trade war could still drag down the global economy, but financial indicators are already flashing warning signs.

[Dec 22, 2018] Looks like a lot of bubbles bursting. Not likely to bounce back, so not much financing available to float pure Permian players

Dec 22, 2018 | peakoilbarrel.com

GuyM x Ignored says: 12/20/2018 at 6:16 pm

Looks like a lot of bubbles bursting. Not likely to bounce back, so not much financing available to float pure Permian players. Doesn't look good for any increase in production. Oil prices will probably stay low with Dow for awhile. Until inventories get closer to zero. Madness.
dclonghorn x Ignored says: 12/20/2018 at 10:12 pm
Interesting article from Goehring investment bank. They estimate that KSA remaining reserves are around 50 billion bbls, instead of the 260 b claimed. They also (surprise) think that was the reason the Aramco IPO was pulled. I also thought the Aramco IPO would never happen because they would not be able to buy an acceptable reserve report.

http://blog.gorozen.com/blog/what-is-the-real-size-of-the-saudi-oil-reserves-pt-2/2

Fifty billion does seem low, however its probably much closer than KSA's 260.

Iron Mike x Ignored says: 12/20/2018 at 11:59 pm
Interesting, they are probably right.
I knew Aramco would pull out of the IPO. They are one of the most secretive companies. How you going to float on the NYSE or London SE with no transparency, which is required by law.
50 billion sounds about right in my worthless opinion. Interestingly enough that would be more or less close to the Permian basin reserves.
I think peak oil will arrive without many people noticing until after it has occurred.
dclonghorn x Ignored says: 12/21/2018 at 6:15 am
A few more thoughts about the referenced Goering report.

First, the basis or their report: "We have good data going up to 2008, however after that point data becomes difficult to find."
Does anyone else have good data on Ghawar production through 2008. Actual Saudi production data is hard to come by, and I would like to see a table of Ghawar production through 2008 if it is out there.
Based on their 2008 data they have included a Hubbert Linearization which is the basis for their claim.

Second, if their production data and linearization are correct, they have not been adjusted for improved results from better technology. I believe the multi lateral super wells Saleri described in his 2005 SPE paper have allowed KSA to recover several percent of additional original oil in place, as well as to maintain high production rates longer.

Third is that it appears many of those super wells were drilled beginning in mid 2000's. It would make sense that the change in Saudi attitudes regarding production restraint between 2014 and now could be due to those multilateral wells watering out.

[Dec 22, 2018] The risk of buying oil companies stock

Dec 22, 2018 | peakoilbarrel.com

shallow sand x Ignored says: 12/20/2018 at 7:54 pm

Coffee. I hope if you have been investing in the Appalachian gas players that you have been short.

The only investment class in oil and gas that may be worse over the past ten years would be the service sector, particularly the drillers.

Interesting that, despite all the activity, the US onshore drillers are becoming penny stocks. I have pointed out Nabors. The rest are all tanking bad it appears.

You made a big deal out of a very long lateral operated by Eclipse Resources. Eclipse equity closed at 76 cents a share.

I am not so sure that ultra cheap oil and gas is such a great thing for the US, given we are now the world's largest producer of both.

Coffeeguyzz x Ignored says: 12/20/2018 at 9:02 pm
Shallow

I never have, nor will I ever in the future, take any financial stake in these or any other companies.

As I have stated numerous times over the years, my primary interest is in operations who is doing what, how it is being done, who is doing it better – or claims to be.

My initial interest in this site way back when was to learn why some people seemed to think this so called Shale Revolution was No Big Deal a retirement party, in the words of Berman.

It was quickly apparent to me that a great deal of unawareness vis a vis industry developments permeated this site's participants.

This, alongside several predisposing factors to NOT want the shale production to explode upwards provided fertile grounds for the soon 12 to 16 million barrels per day US oil production, along with 100+ Bcfd gas production to be a spectaculsrly unforseen reality.

What I prefer or not prefer is secondary to what I believe to be occurring, shallow.

If anyone cares to spend 3 minutes reading the April, 2017 USGS press release accompanying the Haynesville/Bossier assessment, they will read the following from Walter Guidroz, Program Coordinator of the USGS Energy Resources Program

"As the USGS revisits many of the oil and gas basins of the US, we continually find that technological revolutions of the past few years have truly been a game changer in the amount of resources that are now technically recoverable".

Addendum Eclipse is being shut down/folded into another entity.
The lead engineer behind their ultra long laterals is now working with the new outfit from which this technology will continue to spread.

shallow sand x Ignored says: 12/21/2018 at 12:31 am
No offense meant coffee. I know some who post here like to tangle with you. I am not interested in that, just straightforward discussion.

Shale has surprised the heck out of me, and has made me several times strongly consider liquidating my entire investment in oil and gas, absent maybe keeping just a couple of KSA like cheap (to quote PXD CEO) LOE wells to fool around with. Had I known in 2012-13 that this was coming, would have sold all but those few "piddle around with wells." It has been absolutely no fun when these price crashes occur, and is especially no fun knowing that this shale miracle is less profitable than an operation producing less than one bopd per well from very, very old and tired wells.

You have to admit that the way the shale is being developed is destroying the oil and gas industries that are developing it.

Particularly hard hit are the service companies, many which are already bankrupt.

Even XOM, which I have owned for many, many years (prior to the merger, I owned both Exxon and Mobil) has hit the skids, having fallen through the $70 per share barrier.

Range Resources is at $10.26, a level not seen since 2004. It traded as high as $90 before the 2014 crash.

EQT was over $100. Today $18.55

Whiting was nearly $400 (accounting for a reverse split) and now is $21.98

CHK closed at $1.84. All time high was $64.

Nabors Industries, the largest onshore US driller closed at $2.09. Traded at split adjusted $10 in 1978.

Halcon Resources Corp. was over $3,000 split adjusted at one time, went Ch 11 BK, now at $1.65, looking not so good re: BK again.

We shall soon see who can access what in the way of capital to keep going assuming oil prices stay below $50 WTI for a considerable time.

I guess I am always concerned about whether businesses make money. Seems to me that would be of some importance to you, but it isn't, and I suppose there is no harm in that.

I have yet to work anywhere where making money was not the primary motivation.

If the money wasn't important, the shale executives would not make so much of it, I suppose.

I have always had a hard time understanding why they kept drilling wells in Appalachia when the gas was selling for 50 cents per mcf. Not important to you, but maybe to others.

Anyway, if we didn't have different views, places like this wouldn't be very interesting.

[Dec 22, 2018] Crude refusal China shuns U.S. oil despite trade war truce

Dec 22, 2018 | finance.yahoo.com

Chinese refineries that used to purchase U.S. oil regularly said they had not resumed buying due to uncertainty over the outlook for trade relations between Washington and Beijing, as well as rising freight costs and poor profit-margins for refining in the region.

Costs for shipping U.S. crude to Asia on a supertanker are triple those for Middle eastern oil, data on Refinitiv Eikon showed.

A senior official with a state oil refinery said his plant had stopped buying U.S. oil from October and had not booked any cargoes for delivery in the first quarter.

"Because of the great policy uncertainty earlier on, plants have actually readjusted back to using alternatives to U.S. oil ... they just widened our supply options," he said.

He added that his plant had shifted to replacements such as North Sea Forties crude, Australian condensate and oil from Russia.

"Maybe teapots will take some cargoes, but the volume will be very limited," said a second Chinese oil executive, referring to independent refiners. The sources declined to be named because of company policy.

A sharp souring in Asian benchmark refining margins has also curbed overall demand for crude in recent months, sources said.

Despite the impasse on U.S. crude purchases, China's crude imports could top a record 45 million tonnes (10.6 million barrels per day) in December from all regions, said Refinitiv senior oil analyst Mark Tay.

Russia is set to remain the biggest supplier at 7 million tonnes in December, with Saudi Arabia second at 5.7-6.7 million tonnes, he said.

19 hours ago This is an economic/political tight rope for both countries. China is the largest auto market in the world with numerous manufacturers located inside its borders. Apple sales will disappoint inside China after Meng's arrest over Iran sanctions (Huawei is a world heavy weight in terms of sales), and this has already begun inside China due to national pride. Canada has already seen one trade agreement postponed over her detention. US firm on the main have already issued orders to not have key employees travel to their Chinese plants unless absolutely necessary for fear of retaliation. Brussels is actively working on a plan to bypass US Iranian sanctions, which are deeply unpopular in Europe.
The key to this solution might be in automotive. Oil is possibly on the endangered bargaining list. Russia is a key trading partner (for years) with China and, along with Saudi Arabia and Iran (or even without Iran) will be able to supply their needs. Our agricultural sector, particularly in soybeans, has been hit hard, forcing the US govt. into farm subsidies. Brazil just recorded a record harvest in soybeans. The US could counter with lifting Meng from arrest in return for an agricultural break, but those negotiations won't make the mainstream news. Personally, I think her arrest was a very ill-thought move on the part of law enforcement, as the benefits don't even begin to outweigh the massive retaliation to US firms operating inside their borders. It is almost akin to arresting Tim Cook of Apple or Apple's CFO. You don't kill a bug with a sledge hammer.

[Dec 19, 2018] Trump's Iran Policy Has Already Failed by Daniel Larison

Dec 19, 2018 | www.theamericanconservative.com

December 17, 208, 2:42 PM

https://www.facebook.com/plugins/like.php?app_id=347697165243043&channel=https%3A%2F%2Fstaticxx.facebook.com%2Fconnect%2Fxd_arbiter%2Fr%2Fj-GHT1gpo6-.js%3Fversion%3D43%23cb%3Df64680387c7c77%26domain%3Dwww.theamericanconservative.com%26origin%3Dhttps%253A%252F%252Fwww.theamericanconservative.com%252Ff537f7994198f1%26relation%3Dparent.parent&container_width=0&font=lucida%20grande&href=https%3A%2F%2Fwww.theamericanconservative.com%2Flarison%2Ftrumps-iran-policy-has-already-failed%2F&layout=button_count&locale=en_US&sdk=joey&send=true&show_faces=false&width=125

https://platform.twitter.com/widgets/tweet_button.d30011b0f5ce05b98f24b01d3331b3c1.en.html#dnt=false&id=twitter-widget-1&lang=en&original_referer=https%3A%2F%2Fwww.theamericanconservative.com%2Flarison%2Ftrumps-iran-policy-has-already-failed%2F&related=amconmag&size=m&text=Trump%E2%80%99s%20Iran%20Policy%20Has%20Already%20Failed%20%7C%20The%20American%20Conservative&time=1545208054724&type=share&url=https%3A%2F%2Fwww.theamericanconservative.com%2Flarison%2Ftrumps-iran-policy-has-already-failed%2F&via=amconmag

https://apis.google.com/se/0/_/+1/fastbutton?usegapi=1&size=medium&origin=https%3A%2F%2Fwww.theamericanconservative.com&url=https%3A%2F%2Fwww.theamericanconservative.com%2Flarison%2Ftrumps-iran-policy-has-already-failed%2F&gsrc=3p&ic=1&jsh=m%3B%2F_%2Fscs%2Fapps-static%2F_%2Fjs%2Fk%3Doz.gapi.en_US.MO5vxMCzvvQ.O%2Fam%3DQQ%2Frt%3Dj%2Fd%3D1%2Frs%3DAGLTcCPq335D5ksg3qOXO4x5vCykSDofgA%2Fm%3D__features__#_methods=onPlusOne%2C_ready%2C_close%2C_open%2C_resizeMe%2C_renderstart%2Concircled%2Cdrefresh%2Cerefresh&id=I0_1545208054245&_gfid=I0_1545208054245&parent=https%3A%2F%2Fwww.theamericanconservative.com&pfname=&rpctoken=62766058

Christopher Halloran / Shutterstock.com , European External Action Service/Flickr Reimposed sanctions on Iran are cruel and unnecessary, and they are also ineffective :

Iranian Foreign Minister Mohammad Javad Zarif on Saturday said US sanctions will have no impact on the policies of the Islamic republic at home or abroad.

"It is obvious that we are facing pressure by the US sanctions. But will that lead to a change in policy? I can assure you it won't," Zarif told the Doha Forum policy conference in Qatar.

"If there is an art we have perfected in Iran and can teach to others for a price, it is the art of evading sanctions," he added.

Sanctions typically fail to change regime behavior, and they are even more likely to fail if there is no practical way for the targeted regime to get out from under sanctions short of surrender. The more importance that a regime places on the policies that the outside government wants to change, the greater the likelihood of failure will be. When the outside government's goals threaten the regime's security or even its very survival, there is no question of making a deal.

Because the Trump administration is pursuing regime change in all but name, there is no chance that Iran will yield to U.S. pressure. The administration's demands are so ambitious and excessive that no self-respecting state could agree to them without giving up its sovereignty and independence. It should be clear by now that pressure and coercion inspire defiance and intransigence. If the U.S. wants to see changes in Iranian international behavior, it would need to provide assurances and incentives that make taking that risk worth their while. Since this administration has made a point of reneging on commitments already made to Iran, there are no assurances that it could make that the Iranian government could trust, and the administration is allergic to offering any incentives to its negotiating partners for fear of appearing "weak."

[Dec 14, 2018] Small business is a tough place, not just in the oil industry, but all over

"Note that an oil price scenario between the AEO 2018 low oil price case and reference oil price case (average of the two scenarios) would mean that at current well cost, the Permian Basin would never become profitable. This is what Mike Shellman has been saying all along."
Notable quotes:
"... We basically lost $20 a barrel in the blink of an eye. In our case, that is over $100K per month of income loss. This after 2015-17, where the price was less than half what it had been 2011-14. ..."
"... Imagine what would happen if the boss walked into the tech campus of a firm in Silicon Valley and said everyone was taking a $12,000 per month pay cut immediately. Would be a lot of knashing of teeth. ..."
"... Now imagine the pay cut was pretty much in conjunction with an erratic President, supported almost 100% by the industry, ironically, who erroneously thinks .30 a gallon lower gasoline prices will be a boon to the US economy. ..."
Dec 14, 2018 | peakoilbarrel.com

shallow sand, 12/13/2018 at 9:49 am

Dennis.

I think the frustration of a small business oil producer should be obvious.

My family and I have pretty much decided producing oil in the US is not a real business anymore. How can one have a real business when there are so many fixed costs, that do not change much, with the price of the product sold moving up and down like a yo-yo? Add to that at least 50% of the voting public thinking what you are doing is evil. It is now much more preferred that one grow harvest and sell cannabis so people can get high, rather than produce oil for gasoline, diesel, plastics and the numerous other daily used consumer products.

You have done a lot of construction work, so I am sure you know the feeling when there is a recession and work drops way off. At least you might get some sympathy in that situation. Farmers get a government payment. Oil people get laughed at.

We basically lost $20 a barrel in the blink of an eye. In our case, that is over $100K per month of income loss. This after 2015-17, where the price was less than half what it had been 2011-14.

Take the family out here that is living on 20 BOPD, doing all the work themselves. Selling 600 BO per month. That family just saw a $12,000 hit to the top line. The expenses didn't change except for fuel, which has fallen some. Probably less than $1,000 per month savings there.

Imagine what would happen if the boss walked into the tech campus of a firm in Silicon Valley and said everyone was taking a $12,000 per month pay cut immediately. Would be a lot of knashing of teeth.

Now imagine the pay cut was pretty much in conjunction with an erratic President, supported almost 100% by the industry, ironically, who erroneously thinks .30 a gallon lower gasoline prices will be a boon to the US economy. With the alternative being a party openly hostile to the industry, who cannot differentiate between small business owners with small footprints and corporate titans who make no money on the product, but make billions off the corporate largess. We are all terrible polluters who need to get hit with a carbon tax and made to jump through environmental testing hoops despite we are emitting less than the tiny amounts of methane we were emitting 30 years ago.

It is incredibly frustrating.

Hickory, 12/13/2018 at 10:54 am
Shallow. Thanks for explaining how it looks from where you stand.

As much as I hate to think this way, it raises the idea that the government should have a price stability mechanism in place that shields producers from the volatility of the dysfunctional market. Maybe gets updated every 6 months depending on market conditions or something like that. I'm sure everyone would hate it.

Maybe the government should even have a longrange an energy policy. Like a ten yr plan. I know crazy thinking.

shallow sand, 12/13/2018 at 12:43 pm

Regarding my small oil business rant above. Small business is a tough place, not just in the oil industry, but all over.

I think of the grocery store owners. Those guys had a pretty good thing going in small towns 30 years ago. Now they are gone if there is a Walmart nearby.

Same with department stores. The mall in a mid sized town nearby is halfway a ghost town now.

Capitalism can be brutal. But it doesn't seem that another way has proven to be a better idea either. We tend to take freedom for granted in the USA. We are very lucky we have the freedom we do have.

I don't know that price controls are a good idea. I don't know what the answer is to market volatility. We benefitted from getting into oil when no one wanted to touch it, and really did well from 2005–14. Since then, not so good, but maybe our time will come once more.

Overall, shouldn't complain. Just trying to give a unique perspective. Also trying to let everyone know that there are a lot of hardworking small business owners in upstream oil and they aren't the terrible people some make them out to be.

Everything in the media these days is very urban centered and also very East Coast dominant. So different perspectives from different regions is always good, I think.

Longtimber, 12/13/2018 at 3:22 pm
!! Runners-up for Quote of the Year !!
from above:
"Shale oil is a by-product of easy monetary policies which are being withdrawn."
in a way kinda 🙁
https://www.zerohedge.com/news/2018-12-11/real-implications-new-permian-estimates
"Now, I know FOR A FACT that American energy dominance is within our grasp"
and it keeps getting more better
"Reilly stressed, "Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.""
Pretty Powerful results for just a by-product!

Was it JH Kunstler that pointed out that "energy dominance" is kinda kinky?

Synapsid, 12/13/2018 at 7:14 pm
shallow sand,

I always look forward to your posts. I think there's nothing more important here, and that's a high bar.

farmlad, 12/13/2018 at 10:04 pm
Shallow Sand
Neo Capitalism or Creditism might be better terms to describe our current monetary and economic system. When central banks can issue Credit and lend it to their pets by the billions and when those corporations go under they just issue more Credit to the corporations that take their place. This is not Capitalism where companies and individuals produce something valuable and return a profit that they can then reinvest as Capital.

This current economic system is destroying the sources of wealth and valuables. It encourages burning down the house to stay warm. I used to dream of being a big farmer but more and more I feel lucky when I see the stress and fear that so many of the bigger farmers are dealing with.

I appreciate your great contribution to this site. I've learned so much from your comments. They've increased my confidence that this shale business would not be here if it were not for the biggest ponzi scheme to date. And that the peak of Oil production per Capita that was reached in 1979 will never again be topped in my lifetime even with all this fraud on its side.

Some great musings from Charles Hugh Smith
https://www.oftwominds.com/blogoct18/zombies10-18.html

Dennis Coyne, 12/14/2018 at 12:35 am
shallow sand,

Your perspective is much appreciated. I continue to hope for higher oil prices as that is what will allow us to get through the energy transition.

Boomer II, 12/13/2018 at 1:52 pm
Oil consumption might head down.

This one on recession.

https://www.newsweek.com/recession-2020-cfo-economy-market-crash-general-motors-verizon-trump-2019-1255426

This one on automation.

https://www.nytimes.com/2018/12/13/opinion/robots-trump-country-jobs.html

Frugal, 12/13/2018 at 8:48 pm
Currently, legacy decline is just above 500,000 barrels per month. This means that if production is to be increased by 100,000 barrels per month then new wells must produce 600,000 barrels per month of new oil.

If US new oil production is indeed increasing by 600,000 barrels/day per month, this is a mind-blowing number -- 7.2 million barrels/day per year. Has new oil production ever increased by this much anywhere else in the World?

Watcher, 12/14/2018 at 12:00 am
Do we have a computation of what % of total US oil production is from wells < 1 year old? Or even < 3 mos old.
Dennis Coyne, 12/14/2018 at 12:29 am
Watcher,

Go to shaleprofile.com to get an idea. In August 2018 roughly 25% of US C+C is from wells which started producing in the first 8 months of 2018.

[Dec 13, 2018] Multipolar World Order In The Making Qatar Dumps OPEC

Dec 13, 2018 | www.zerohedge.com

Besides that, Saudi Arabia requires the organization to maintain a high level of oil production due to pressure coming from Washington to achieve a very low cost per barrel of oil. The US energy strategy targets Iranian and Russian revenue from oil exports, but it also aims to give the US a speedy economic boost. Trump often talks about the price of oil falling as his personal victory. The US imports about 10 million barrels of oil a day, which is why Trump wrongly believes that a decrease in the cost per barrel could favor a boost to the US economy. The economic reality shows a strong correlation between the price of oil and the financial growth of a country, with low prices of crude oil often synonymous of a slowing down in the economy.

It must be remembered that to keep oil prices high, OPEC countries are required to maintain a high rate of production, doubling the damage to themselves. Firstly, they take less income than expected and, secondly, they deplete their oil reserves to favor the strategy imposed by Saudi Arabia on OPEC to please the White House. It is clearly a strategy that for a country like Qatar (and perhaps Venezuela and Iran in the near future) makes little sense, given the diplomatic and commercial rupture with Riyadh stemming from tensions between the Gulf countries.

In contrast, the OPEC+ organization, which also includes other countries like the Russian Federation, Mexico and Kazakhstan, seems to now to determine oil and its cost per barrel. At the moment, OPEC and Russia have agreed to cut production by 1.2 million barrels per day, contradicting Trump's desire for high oil output.

With this last choice Qatar sends a clear signal to the region and to traditional allies, moving to the side of OPEC+ and bringing its interests closer in line with those of the Russian Federation and its all-encompassing oil and gas strategy, two sectors in which Qatar and Russia dominate market share.

In addition, Russia and Qatar's global strategy also brings together and includes partners like Turkey (a future energy hub connecting east and west as well as north and south) and Venezuela. In this sense, the meeting between Maduro and Erdogan seems to be a prelude to further reorganization of OPEC and its members.


LetThemEatRand , 9 hours ago link

It's crazy to think of all of the natural gas burned off by the world's oil producers. I think of those oil platforms that have a huge burning flame on top. This is the kind of **** that reminds us that the people who control the world care not for the people who live here. Can't make a buck from it? ******* burn it.

The Dreadnought , 8 hours ago link

Right fuckin' A

Koba the Dread , 7 hours ago link

Consider though that those oil producers are only in it for the money; it's not an avocation with them. I imagine if there was a way to salvage the natural gas, it would be done. Mo Muny would dictate it.

Ms No , 9 hours ago link

This could be the beggining of a level 5 popcorn event. It started a year or two ago and when I saw it everybody laughed. Well look at it now. Saudi wants to defect. They have had nothing but problems with the House of Sodomy for quite some time now.

I wonder what Mossad and the CIA are planning.

serotonindumptruck , 8 hours ago link

A False Flag operation to block the Strait of Hormuz?

Brazen Heist II , 8 hours ago link

They are planning on removing Salman junior if he doesn't stop embarrassing their sorry asses

Ms No , 9 hours ago link

If this leads to war in the Persian Gulf Edgar Cayce called it. The empire will burn that place down before losing it. They may fail but something is going to go down.

Are the Sauds still full heartedly pushing the Zionist mission in Yemen?

"...submissive allies as Saudi Arabia"

Is that what they call it now?

jmarioneaux , 9 hours ago link

I feel something big is coming with Iran.

PeaceForWorld , 6 hours ago link

As an Iranian-American I have been waiting for something big to happen with Iran. I am really tired of waiting. I hope that Iran will grow some balls and fight the coalition. I know that there are 80 million lives in danger, including my mom going back to Iran for a short term. But this has been like a long torture and unending nightmare.

TeraByte , 9 hours ago link

There is no multipolarity yet, but a bipolar hype of the world dominance run by US and its vassals. An awakening will be harsh, when these realize their emperor goes naked.

[Dec 09, 2018] Pompeo is a Deep State Israel-firster with a nasty neocon agenda

Trump lost control of foreign policy, when he appointed Pompeo. US voters might elect Hillary with the same effect on foreign policy as Pompeo.
Notable quotes:
"... It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel. ..."
"... Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union. ..."
"... As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North. ..."
"... The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF. ..."
Nov 30, 2018 | www.moonofalabama.org

jim slim | Nov 29, 2018 4:04:44 AM | 24

Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.

Peter AU 1 , Nov 28, 2018 9:44:50 PM | link

Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.

Trump, Israel and the Sawdi's. US no longer needs middle east oil for strategic supply. Trump is doing away with the petro-dollar as that scam has run its course and maintenance is higher than returns. Saudi and other middle east oil is required for global energy dominance.

Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union.

Pft , Nov 29, 2018 1:15:05 AM | link

As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North.

Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF.

[Dec 09, 2018] Wannabe Zionists (Bolton) has been trying hard to show his loyalty to the Jewish State

Notable quotes:
"... Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to. ..."
"... Time for Bolton to send for the clairvoyant Theresa May who has managed to accuse Russia, and Mr. Putin personally, in the Skripals' poisoning n the absence of any evidence ..."
Nov 20, 2018 | www.unz.com

annamaria, November 13, 2018 at 6:43 pm GMT

@Z-man The "wannabe Zionists (Bolton)" has been trying hard to show his loyalty to the Jewish State.

The latest tragicomic attempt by the mustached "person of easy morals": "John Bolton Says "No Evidence" Implicating Crown Prince On Khashoggi Kill Tape" https://www.zerohedge.com/news/2018-11-13/john-bolton-says-no-evidence-implicating-crown-prince-khashoggi-kill-tape

Comment section (David Wooten): "According to the crown prince himself, Trump's [Jewish] son-in-law gave him a secret list of his enemies -- the ones like Al Aweed who were tortured and shaken down for cash. Khashoggi might even have been on that list.

One or more of the tortured ones likely tipped off Erdogan, which is why Turkey only needed to enter the consulate, retrieve the recorded audio device they planted, and walk out with the evidence. Turkey also has evidence that puts MbS' personal doctor and other staff arriving in Turkey at convenient times to do the job -- and probably more. Khashoggi was anything but a nice person but Trump cannot say that or he'll likely be accused of involvement in his murder.

Dissociation is made far more difficult by the fact that Jared is a long time friend of Netanyahu who, like Jared, has befriended MbS .

Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to.

Were it not for the Khashoggi affair, fewer Republican seats would have been lost in the election."

-- Time for Bolton to send for the clairvoyant Theresa May who has managed to accuse Russia, and Mr. Putin personally, in the Skripals' poisoning n the absence of any evidence .

These people -- Bolton, May, Gavin Williamson and likes -- are a cross of the ever-eager whores and petty brainless thieves. To expose themselves as the willing participants in the ZUSA-conducted farce requires a complete lack of integrity.

Of course, there is no way to indict the journalist's murderers since the principal murderer is a personal friend of Netanyahu and Jared.

Jump, Justice, jump, as high as ordered by the "chosen."

By the way, why do we hear nothing about Seth Rich who was murdered in the most surveilled city of the US?

Z-man , says: November 13, 2018 at 7:21 pm GMT
@annamaria A 1st grader can see that MbS was behind the murder of Kashoggi.

Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to.

I've been hoping for this since they moved to Washington with 'big daddy'.

annamaria , says: November 14, 2018 at 12:49 pm GMT
@Anon " crappy bedtime reading the woolyheadedness "

Hey, Anon[436], is this how your parents have been treating you? My condolences.

If you feel that you succeeded with your "see, a squirrel" tactics of taking attention from the zionists' dirty and amoral attempts at coverup of the murder of the journalists Khashoggi, which was accomplished on the orders of the clown prince (the dear friend of Bibi & Jared), you are for a disappointment.

One more time for you, Anon[436]: the firm evidence of MbS involvement in the murder of Khashoggi contrasts with no evidence of the alleged poisoning of Skripals by Russian government.

The zionists have been showing an amazing tolerance towards the clown prince the murderer because zionists need the clown prince for the implementation of Oded Yinon Plan for Eretz Israel.

The stinky Skripals' affair involves harsh economic actions imposed on the RF in the absence of any evidence , as compared to no sanctions in response to the actual murder of Khashoggi, which involved MbS according to the available evidence . Thanks to the zionists friendship with the clown prince, the firm evidence of Khashoggi murder is of no importance. What else could be expected from the "most moral" Bibi & Kushner and the treasonous Bolton.

Z-man , says: November 14, 2018 at 1:58 pm GMT
@annamaria

The stinky Skripals' affair involves harsh economic actions imposed on the RF in the absence of any evidence, as compared to no sanctions in response to the actual murder of Khashoggi, which involved MbS according to the available evidence. Thanks to the zionists friendship with the clown prince, the firm evidence of Khashoggi murder is of no importance. What else could be expected from the "most moral" Bibi & Kushner and the treasonous Bolton.

Bears repeating.

[Dec 08, 2018] We will also have to see how long it takes for the shale frackers to cut output in the face of $50 oil

Dec 08, 2018 | oilprice.com

We will also have to see how long it takes for the shale frackers modify their behavior in the face of $50 oil. We haven't seen any signs so far, with a few rigs continued to be added each week. At some point the frackers will wake up and determine that oil at $50 doesn't go as far as oil at $75 and tap the brakes just a hair. We are also due for a seasonal pause in some of the U.S. Northern areas, as winter takes a bite out of drilling activity.

In practical terms we will probably be well into the first quarter before we see any impact from OPEC production cuts. However, once we do, it will be like June of 2017 all over again, and the price of oil could strongly respond to the upside.

By David Messler for Oilprice.com

[Dec 08, 2018] Iran nuclear deal Trump s oil gamble comes at just the wrong time by Ambrose Evans-Pritchard

This article is from May 2018 but it read as if it was written yesterday.
Notable quotes:
"... He estimates that sanctions will cut Iran's exports by up to 500,000 barrels a day later this year. "It could well be much more in 2019," he said. ..."
Dec 08, 2018 | smh.com.au

"U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market," said Gary Ross, chief executive of Black Gold Investors and a veteran OPEC watcher. channelnewsasia.com 10 May 2018

Donald Trump could hardly have chosen a more treacherous economic moment to tear up the "decaying and rotten deal" with Iran. The world crude market is already tightening very fast. Joint production curbs by Opec and Russia have cleared the four-year glut of oil. There is no longer an ample safety buffer against supply shocks. The geopolitical "premium" on prices has returned. Tensions run high:

The Maduro regime in Venezuela is entering its last agonies, and the country's oil industry is imploding. North America has run into an infrastructure crunch. There are not yet enough pipelines to keep pace with shale oil output from the Permian Basin of west Texas, and it is much the same story in the Alberta tar sands. The prospect of losing several hundred thousand barrels a day of Iranian oil exports would not have mattered much a year ago. It certainly matters now.

World leaders respond to President Trump's move to reimpose economic sanctions on Iran while pulling the United States out of the international agreement aimed at stopping Tehran from obtaining a nuclear bomb.

Oil price shock is looming

It is the confluence of simmering political crises in so many places that has driven Brent crude to $US77 a barrel, up 60 per cent since last June. "We believe an oil price shock is looming as early as 2019 as several elements combine to form a 'perfect storm'," said Westbeck Capital. It predicts $US100 crude in short order, with $US150 coming into sight as the world faces a crunch all too reminiscent of July 2008. The fund warns that the investment collapse since 2014 is about to deliver its sting. Declining fields are not being replaced. Output from conventional projects has until now been rising but will fall precipitously by 1.5 million barrels a day next year. By then global spare capacity will be down to a lethally thin 1 per cent. US shale cannot plug the gap. "The mantra after 2014 of lower for longer has lulled oil analysts into a torpor," Westbeck said. Needless to say, a spike to $US150 would precipitate a global recession.

The US might hope to weather such a traumatic episode now that it is the world's biggest oil producer but it would be fatal for oil-starved Europe. Such a scenario would test the unreformed euro to destruction. Britain, France and Germany may earnestly wish to preserve the Iran deal but they can do little against US financial hegemony and the ferocity of "secondary sanctions". The US measures cover shipping, insurance, and the gamut of financial and logistical support for Iran's oil industry.
In the end, there are infinitely greater matters at stake than barrels of oil.
Any European or Asian company that falls foul of this will be shut out of the US capital markets and dollarised international payments system. The EU has talked of beefing up the 1996 Blocking Regulation used to shield European companies from extraterritorial US sanctions against Libya. But this is just bluster. No European company with operations in the US would dare flout the US Treasury. "A choice for corporate Europe between the US and Iran is unequivocally going to fall the way of the US," said Richard Robinson from Ashburton Global Energy Fund.

Rise in oil prices turns malign

He said Europe will have to slash its imports from Iran by 60 per cent because groups such as ENI or Total will refuse to ship the oil, whatever the strategic policy of the EU purports to be. This dooms the nuclear deal (JCPOA) since Iran will not abide by the terms if the EU cannot deliver on its rhetoric, let alone come through with the $US200 billion ($251 billion) of foreign investment coveted by Tehran.

David Fyfe from oil traders Gunvor said we do not yet have enough details from Washington to judge how quickly companies will have to act. He estimates that sanctions will cut Iran's exports by up to 500,000 barrels a day later this year. "It could well be much more in 2019," he said.

Late last year it was still possible to view rising oil prices as benign, the result of a booming world economy. This year it has turned malign. Global growth has rolled over. The broad IHS index of raw materials has been falling since February.

Europe's catch-up spurt fizzled out in the first quarter. Japan's GDP probably contracted. The higher oil price is itself part of the cause.

$US500 billion extra 'tax'

Even at current levels, it acts as an extra $US500 billion "tax" this year for consumers in Asia, Europe and America. Not all of the windfall enjoyed by the petro-powers is recycled quickly back into global spending.

One cause of the slowdown is the credit squeeze in China, which is ineluctably feeding through into the real economy with a delay. Proxy indicators suggest that true growth has fallen below 5 per cent.

My own view is that monetary tightening by the US Federal Reserve - and declining stimulus from the European Central Bank - is doing more damage than widely presumed.

Higher US interest rates are pushing up borrowing costs for much of the world. Three-month dollar Libor rates used to price $US9 trillion of global contracts have risen 76 basis points since January.

The Fed is shrinking its balance sheet, draining international dollar liquidity at a quickening pace. If the Fed is not careful, it will tip the US economy into a stall.

Ominously, we are seeing the first signs of a US dollar rally, tantamount to a "short squeeze" on Turkey, Argentina and Indonesia, among other emerging market debtors.

Toxic combination

The combination of a slowing economy and an oil supply shock is toxic, even if the "energy intensity" of world GDP is now half the level of 30 years ago.

Opec and Russia can of course lift their output cap at any time, though that alone will not restore the full 1.8m barrels a day of original curbs. Venezuela is now in unstoppable free-fall.

The Saudis have pledged to uphold the "stability of oil markets" and to help "mitigate the impact of any potential supply shortages". Kuwait and Abu Dhabi could add a little. Yet cyclical forces may be moving even beyond their control.

In the end, there are infinitely greater matters at stake than barrels of oil. Trump is throwing US power behind Saudi Arabia in the epic Sunni-Shia battle for dominance over the Middle East, and behind Israel in its separate battle with Iran.

What can go wrong?

Both conflicts are on a hair trigger. Israel attacked an Iranian air base in Syria last month and killed seven revolutionary guards. This is a dangerous escalation from proxy conflict to direct hostilities. The JCPOA nuclear deal may be all that restrains the Iranian side from lashing out.

Saudi Arabia's impetuous young leader Mohammad bin Salman is itching to settle the score of all scores with Iran, the Iranian revolutionary guard are in turn itching to launch a one-year dash for nuclear weapons, and Trump is itching for regime change. What can go wrong?

The Daily Telegraph, London

[Dec 06, 2018] World Bank Warns Of Extreme Volatility In Oil Markets

2019 might be the year when Western powers start paying the price for 2014-2017 oil price crash. Three years of subpar capital investment will bite them in the back.
Dec 06, 2018 | oilprice.com
Russia Economic Report said that OPEC was the single most important factor for oil price outlooks in the short term.

"As non-OPEC oil supply growth is expected to be greater than that of global demand, the outlook for oil prices depends heavily on supply from OPEC members," the report's authors noted. The level of spare capacity among OPEC members is estimated to be low at present, suggesting there are limited buffers in the event of a sudden shortfall in supply of oil, raising the likelihood of oil price spikes in 2019."

The World Bank is not alone in seeing OPEC's spare capacity as an important factor for oil prices going forward. Spare capacity provides a cushion against price shocks as evidenced most recently by the June decision of the cartel and Russia to start pumping more again after 18 months of cutting to arrest a too fast increase in oil prices. They had the capacity to do it and prices stopped rising, helped by downward revisions of economic forecasts.

Now, the oil market is plagued with concerns about oversupply, but this could change quite quickly if there is any sign that OPEC is nearing the end of its spare production capacity. As to the likelihood of such a sign emerging anytime soon, this remains to be seen.

The U.S. Energy Information Administration estimates OPEC's spare capacity at a little over 1 million bpd as of the fourth quarter of this year. That's down from 2.1 million bpd at the end of 2017, but with Venezuela's production in free fall and with Iran pumping less because of the U.S. sanctions, the total spare capacity of the group has declined substantially.

[Nov 29, 2018] If The Saudi s Oil No Longer Matters Why Is Trump Still Supporting Them

Notable quotes:
"... Washington Post ..."
"... Wall Street journal ..."
"... Everyone knows it's the US presence in the Middle East which creates terrorists, both as proxies of and in resistance to the US imperial presence (and often one and then the other). So reading Orwellian language, Pompeo is saying the US wants to maximize Islamic terrorism in order to provide a pretext for creeping totalitarianism at home and abroad. ..."
"... The real reason is to maintain the petrodollar system, but there seems to be a conspiracy of silence never to mention it among both supporters and opponents of Trump. ..."
"... everyone knows why the usa is in the middle east.. to support the war industry, which is heavily tied to the financial industry.. up is down and down is up.. that is why the usa is great friends with ksa and israel and a sworn enemy of iran... what they don't say is they are a sworn enemy of humanity and the thought that the world can continue with their ongoing madness... ..."
"... The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF ..."
Nov 29, 2018 | www.moonofalabama.org

Russ , Nov 28, 2018 3:28:31 PM | link

Why are U.S. troops in the Middle East?

In an interview with the Washington Post U.S. President Donald Trump gives an answer :

Trump also floated the idea of removing U.S. troops from the Middle East, citing the lower price of oil as a reason to withdraw.

"Now, are we going to stay in that part of the world? One reason to is Israel ," Trump said. "Oil is becoming less and less of a reason because we're producing more oil now than we've ever produced. So, you know, all of a sudden it gets to a point where you don't have to stay there."

It is only Israel, it is no longer the oil, says Trump. But the nuclear armed Israel does not need U.S. troops for its protection.

And if it is no longer the oil, why is the U.S. defending the Saudis?

Trump's Secretary of State Mike Pompeo disagrees with his boss. In a Wall Street journal op-ed today he claims that The U.S.-Saudi Partnership Is Vital because it includes much more then oil:

[D]egrading U.S.-Saudi ties would be a grave mistake for the national security of the U.S. and its allies.

The kingdom is a powerful force for stability in the Middle East. Saudi Arabia is working to secure Iraq's fragile democracy and keep Baghdad tethered to the West's interests, not Tehran's. Riyadh is helping manage the flood of refugees fleeing Syria's civil war by working with host countries, cooperating closely with Egypt, and establishing stronger ties with Israel. Saudi Arabia has also contributed millions of dollars to the U.S.-led effort to fight Islamic State and other terrorist organizations. Saudi oil production and economic stability are keys to regional prosperity and global energy security.

Where and when please has Saudi Arabia "managed the flood of refugees fleeing Syria's civil war". Was that when it emptied its jails of violent criminals and sent them to wage jihad against the Syrian people? That indeed 'managed' to push millions to flee from their homes.

Saudi Arabia might be many things but "a powerful force for stability" it is not. Just ask 18 million Yemenis who, after years of Saudi bombardment, are near to death for lack of food .

Pompeo's work for the Saudi dictator continued today with a Senate briefing on Yemen. The Senators will soon vote on a resolution to end the U.S. support for the war. In his prepared remarks Pompeo wrote:

The suffering in Yemen grieves me, but if the United States of America was not involved in Yemen, it would be a hell of a lot worse.

What could be worse than a famine that threatens two third of the population?

If the U.S. and Britain would not support the Saudis and Emirates the war would end within a day or two. The Saudi and UAE planes are maintained by U.S. and British specialists. The Saudis still seek 102 more U.S. military personal to take care of their planes. It would be easy for the U.S. to stop such recruiting of its veterans.

It is the U.S. that holds up an already watered down UN Security Council resolution that calls for a ceasefire in Yemen:

The reason for the delay continues to be a White House worry about angering Saudi Arabia, which strongly opposes the resolution, multiple sources say. CNN reported earlier this month that the Saudi crown prince, Mohammed bin Salman, "threw a fit" when presented with an early draft of the document, leading to a delay and further discussions among Western allies on the matter.

We recently wrote that pandering to the Saudis and keeping Muhammad bin Salman in place will hurt Trump's Middle East policies . The piece noted that Trump asked the Saudis for many things, but found that:

There is really nothing in Trump's list on which the Saudis consistently followed through. His alliance with MbS brought him no gain and a lot of trouble.

Trump protected MbS from the consequences of murdering Jamal Khashoggi. He hoped to gain leverage with that. But that is not how MbS sees it. He now knows that Trump will not confront him no matter what he does. If MbS "threws a fit" over a UN Security Council resolution, the U.S. will drop it. When he launches his next 'adventure', the U.S. will again cover his back. Is this the way a super power is supposed to handle a client state?

If Trump's instincts really tell him that U.S. troops should be removed from the Middle East and Afghanistan, something I doubt, he should follow them. Support for the Saudi war on Yemen will not help to achieve that. Pandering to MbS is not MAGA.

Posted by b on November 28, 2018 at 03:12 PM | Permalink

Comments Pompeo: "Saudi Arabia has also contributed millions of dollars to the U.S.-led effort to fight Islamic State and other terrorist organizations."

Everyone knows it's the US presence in the Middle East which creates terrorists, both as proxies of and in resistance to the US imperial presence (and often one and then the other). So reading Orwellian language, Pompeo is saying the US wants to maximize Islamic terrorism in order to provide a pretext for creeping totalitarianism at home and abroad.


lysias , Nov 28, 2018 3:35:15 PM | link

The real reason is to maintain the petrodollar system, but there seems to be a conspiracy of silence never to mention it among both supporters and opponents of Trump.
Ross , Nov 28, 2018 3:41:42 PM | link
There is really nothing in Trump's list on which the Saudis consistently followed through. His alliance with MbS brought him no gain and a lot of trouble.

He did get to fondle the orb - although fuck knows what weirdness was really going on there.

james , Nov 28, 2018 3:47:06 PM | link
thanks b... pompeo is a very bad liar... in fact - everything he says is about exactly the opposite, but bottom line is he is a bad liar as he is thoroughly unconvincing..

everyone knows why the usa is in the middle east.. to support the war industry, which is heavily tied to the financial industry.. up is down and down is up.. that is why the usa is great friends with ksa and israel and a sworn enemy of iran... what they don't say is they are a sworn enemy of humanity and the thought that the world can continue with their ongoing madness...

oh, but don't forget to vote, LOLOL.... no wonder so many are strung out on drugs, and the pharma industry... opening up to the msm is opening oneself up to the world george orwell described many years ago...

uncle tungsten , Nov 28, 2018 3:49:24 PM | link
Take a wafer or two of silicon and just add water. The oil obsession has been eclipsed and within 20 years will be in absolute disarray. The warmongers will invent new excuses.

https://www.youtube.com/watch?v=_Lk3elu3zf4

karlof1 , Nov 28, 2018 4:33:18 PM | link
A hypothetical: No extraordinary amounts of hydrocarbons exist under Southwest Asian ground; just an essential amount for domestic consumption; in that case, would Zionistan exist where it's currently located and would either Saudi Arabia, Iraq and/or Iran have any significance aside from being consumers of Outlaw US Empire goods? Would the Balfour Declaration and the Sykes/Picot Secret Treaty have been made? If the Orinoco Oil Belt didn't exist, would Venezuela's government be continually targeted for Imperial control? If there was no Brazilian offshore oil, would the Regime Change effort have been made there? Here the hypotheticals end and a few basic yet important questions follow.

Previous to the 20th Century, why were Hawaii and Samoa wrested from their native residents and annexed to Empire? In what way did the lowly family farmers spread across 19th Century United States further the growth of its Empire and contribute to the above named annexations? What was the unspoken message sent to US elites contained within Frederic Jackson Turner's 1893 Frontier Thesis ? Why is the dominant language of North America English, not French or Spanish?

None of these are rhetorical. All second paragraph questions I asked of my history students. And all have a bearing on b's fundamental question.

A. Person , Nov 28, 2018 5:20:13 PM | link
b says, "And it its no longer the oil, why is the U.S. defending the Saudis?"

The US has a vital interest in protecting the narrative of 9/11. The Saudis supplied the patsies. Mossad and dual-citizen neocons were the architects of the event. Hence, the US must avoid a nasty divorce from the Saudis. The Saudis are in a perfect blackmailing position.

Tobin Paz , Nov 28, 2018 5:50:19 PM | link
Maybe Trump is unaware, but the fracking boom is a bubble made possible by near zero interest rates:

U.S. SHALE OIL INDUSTRY: Catastrophic Failure Ahead

Of course, most Americans have no idea that the U.S. Shale Oil Industry is nothing more than a Ponzi Scheme because of the mainstream media's inability to report FACT from FICTION. However, they don't deserve all of the blame as the shale energy industry has done an excellent job hiding the financial distress from the public and investors by the use of highly technical jargon and BS.

Oil is the untold story of modern history.

NOBTS , Nov 28, 2018 6:08:53 PM | link
S.A. is a thinly disguised US military base, hence the "strategic importance" and the relevance of the new Viceroy's previous experience as a Four Star General. It's doubtful that any of the skilled personnel in the SA Air Force are other than former US/Nato. A few princes might fancy themselves to be daring fighter pilots. In case of a Anglo-Zio war with Iran SA would be the most forward US aircraft carrier. The Empire is sustained by its presumed military might and prizes nothing more than its strategically situated bases. Saud would like to capture Yemen's oil fields, but the primary purpose of the air war is probably training. That of course is more despicably cynical than mere conquest and genocide.
Pft , Nov 28, 2018 6:08:56 PM | link
Trump is the ultimate deceiver/liar. Great actor reading from a script. The heel in the Fake wrestling otherwise known as US politics. It almost sounds as if he is calling for an end of anymore significant price drops now that he has got Powell on board to limit interest rate hikes. After all if you are the worlds biggest producer you dont want prices too low. These markets are all manipulated. I cant imagine how much insider trading is going on. If you look at the oil prices, they started dropping in October with Iran sanctions looming (before it was announced irans shipments to its 8 biggest buyers would be exempt) and at the height of the Khashoggi event where sanctions were threatened and Saudi was making threats of their own. In a real free market prices increase amidst supply uncertainty.

Regardless of what he says he wants and gets now, he is already planning a reversal. Thats how the big boys win, they know whats coming and when the con the smaller fish to swim one way they are lined up with a big mouth wide open. Controlled chaos and confusion. For every winner there must be a loser and the losers assets/money are food for the Gods of Money and War

As for pulling out of the Middle East Bibi must have had a good laugh. My money is on the US to be in Yemen to protect them from the Saudis (humanitarian) and Iranian backed Houthis while in reality we will be there to secure the enormous oil fields in the North. Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF

psychohistorian , Nov 28, 2018 6:35:06 PM | link
@ Pft who wrote: "The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF"

BINGO!!! Those that control finance control most/all of everything else.

Augustin L , Nov 28, 2018 6:37:43 PM | link

Saudi Arabia literally owns close to 8% of the United States economy through various financial instruments. Their public investment funds and dark pools own large chunks from various strategic firms resting at the apex of western power such as Blackstone. Trump and Pompeo would be stupid to cut off their nose to spite their face... It's all about the petrodollar, uncle sam will ride and die with saudi barbaria. If push comes to shove and the saudis decide to untether themselves from the Empire, their sand kingdom will probably be partitioned.
Pnyx , Nov 28, 2018 7:02:31 PM | link
The oil certainly still plays an important role, the u.s. cannot maintain the current frack oil output for long. For Tronald's term in office it will suffice, but hardly longer. (The frack gas supplies are much more substantial.)

Personal interests certainly also play a role, and finally one should not make u.s. foreign policy more rational than it is. Much is also done because of traditions and personal convictions. Often they got it completely wrong and the result was a complete failure.

Likklemore , Nov 28, 2018 7:07:15 PM | link
Let us watch what Trump does with this or if the resolution makes it to daylight:

Senate advances Yemen resolution in rebuke to Trump

The Senate issued a sharp rebuke Wednesday to President Trump, easily advancing a resolution that would end U.S. military support for the Saudi-led campaign in Yemen's civil war despite a White House effort to quash the bill.

The administration launched an eleventh-hour lobbying frenzy to try to head off momentum for the resolution, dispatching Defense Secretary James Mattis and Secretary of State Mike Pompeo to Capitol Hill in the morning and issuing a veto threat less than an hour before the vote started.

But lawmakers advanced the resolution, 63-37, even as the administration vowed to stand by Saudi Arabia following outcry over the killing of journalist Jamal Khashoggi.

"There's been a lot of rhetoric that's come from the White House and from the State Department on this issue," said Sen. Bob Corker (R-Tenn.), chairman of the Foreign Relations Committee. "The rhetoric that I've heard and the broadcasts that we've made around the world as to who we are have been way out of balance as it relates to American interests and American values." [/]
LINK TheHill

But Mattis says there is no smoking gun to tie the Clown Thug-Prince to Kashoggi's killing.
TheHill

And Lyias @ 2 is a bingo. Always follow the fiat.

Soon, without any announcements, if they wish to maintain selling oil to China, KSA will follow Qatar. It will be priced in Yuan...especially given the escalating U.S. trade war with China.

2019 holds interesting times. Order a truckload of popcorn.

Midwest For Truth , Nov 28, 2018 7:29:46 PM | link
You would have to have your head buried in the sand to not see that the Saudi "Kings" are crypto-Zionistas. Carl Sagan once said, "One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back." And Mark Twain also wrote "It's easier to fool people than to convince them that they have been fooled."
karlof1 , Nov 28, 2018 7:59:31 PM | link
Gee, not one taker amongst all these intelligent folk. From last to first: 1588's Protestant Wind allowed Elizabeth and her cronies to literally keep their heads as Nature helped Drake defeat the Spanish Armada; otherwise, there would be no British Empire root to the USA, thus no USA and no future Outlaw US Empire, the British Isles becoming a Hapsburg Imperial Property, and a completely different historical lineage, perhaps sans World Wars and atomic weapons.

Turner's message was with the Frontier closed the "safety valve" of contine