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nuckin_futz

Saudi Arabia declares oil price war on fellow OPEC (and non OPEC)members.

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OMFG Markets are open and it's absolutely carnage.

 

Oil opened at $34.73/barrel and immediately got destroyed down to $30.01. Currently $31.62 -24%

 

Brent crude about the same -24% ish

 

US stock futures pummeled down to the recent lows.

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1 hour ago, Boudrias said:

Low margin export economy can work in a healthy global economy but is still short sighted. In a down world economy it is much worse, lower margins and even questionable access  to markets as protectionism escalates. This is why IMO Canada should have a $1 trillion sovereign wealth fund instead of a $1 trillion debt. In a serious country this would be a national security issue. In Canada it doesn’t even warrant a debate. It is another reason why I think AB will separate and there won’t be that much fight about it. 

If only a PM had the forethought at some point to create a national plan that would have created a Nation wide fund of that nature.

 

Like an energy program of some sort.

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33 minutes ago, nuckin_futz said:

OMFG Markets are open and it's absolutely carnage.

 

Oil opened at $34.73/barrel and immediately got destroyed down to $30.01. Currently $31.62 -24%

 

Brent crude about the same -24% ish

 

US stock futures pummeled down to the recent lows.

That's European markets and Asian?

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1 minute ago, Warhippy said:

That's European markets and Asian?

US markets. Nymex oil and Globex index futures start the week at 3 pm on Sunday.

 

www.investing.com has live quotes. you'll see the panel on the right hand side. If there's a green clock on the far right it's trading live.

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3 minutes ago, nuckin_futz said:

US markets. Nymex oil and Globex index futures start the week at 3 pm on Sunday.

 

www.investing.com has live quotes. you'll see the panel on the right hand side. If there's a green clock on the far right it's trading live.

Just saw it.  Hot damn that's a route in the making.  Apparently SA is willing to increase production via Saudi Aramco to 12+ million BPD

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Posted (edited)

This has the potential to be just posturing.  Most likely is.  But it also has the potential to be sooooo much worse

 

https://www.middleeasteye.net/news/saudis-plan-crude-oil-output-increase-begin-price-war-report

 

Saudi Arabia plans to increase its crude oil output next month to more than 10 million barrels a day in response to the collapse of its Opec+ alliance with Russia, Bloomberg News reported on Saturday.

Brent slid to its biggest daily loss in more than 11 years on Friday after Russia balked at Opec's proposed steep production cuts to stabilise prices hit by economic fallout from the coronavirus, and OPEC responded by removing limits on its own production, Reuters reported.

"Prices plunged because the Opec confab ended up being an epic fail on the part of all involved. Russia has clearly decided to employ a scorched earth approach to the oil market: every country for itself," John Kilduff, partner at Again Capital in New York, told Reuters.

The world’s biggest oil exporter then began a price war on Saturday by slashing the prices it sells crude into foreign markets by the most in at least 20 years, offering unprecedented discounts in Europe, the Far East and the US to entice refiners to purchase Saudi crude at the expense of other suppliers.

At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record of 12 million barrels a day, according to people familiar with the conversations who asked not to be identified to protect commercial relations, Bloomberg reported.

Brent futures had their its biggest daily percentage fall on Friday since December 2008, down $4.72, or 9.4 percent, to settle at $45.27 a barrel. It was Brent's lowest closing price since June 2017.

With demand being ravaged by the coronavirus outbreak, opening the taps may throw the oil market into chaos.

Other OPEC producers, including Iraq, Kuwait and the United Arab Emirates, will likely follow Saudi Arabia's move with steep cuts to their own oil prices for April, Reuters reported on Sunday.

“That’s the oil market equivalent of a declaration of war,” said a commodities hedge fund manager, asking not to be identified because of the sensitivity of the situation.

Negotiating chess game

The break in a three-year alliance between the Saudi-led oil cartel and Russia to support prices may be temporary. The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise. But if the collapse is lasting, oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years, the New York Times reported on Sunday.

“If a true price war ensues, there will be plenty of pain in the oil markets,” Badr Jafar, president of Crescent Petroleum, a United Arab Emirates oil company, told the Times. “Many will be bracing for the economic and geopolitical shocks of a low-price environment.”

The production increase and deep discounts mark a dramatic escalation by the Saudis after Russia rejected an ultimatum on Friday in Vienna at the Opec+ meeting to join in a collective production cut. After the talks collapsed, Russia indicated countries were free to pump-at-will from the end of March.

With jet fuel, gasoline and diesel consumption rapidly decreasing amid the economic impact of the coronavirus outbreak, the energy market now faces a simultaneous supply-and-demand shock.

After the failure in Vienna, Riyadh responded within hours by cutting its so-called official selling prices, offering record discounts for some of the crude it sells worldwide, according to a copy of the prices seen by Bloomberg News. Aramco has set the prices, but the official communication to clients is likely to come on Monday, a person familiar with the matter said.

The Saudi Energy ministry didn’t respond to a request for comment from Bloomberg.

Oil traders are looking to historical charts for an indication of how low prices could go. One potential target is $27.10 a barrel, reached in 2016 during the last price war. Some believe the market could go even lower.

“We’re likely to see the lowest oil prices of the last 20 years in the next quarter,” Roger Diwan, an oil analyst at consultant IHS Markit and a veteran OPEC watcher, told Bloomberg, implying that the price could fall below $20 a barrel.

Edited by Warhippy
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6 minutes ago, Warhippy said:

This has the potential to be just posturing.  Most likely is.  But it also has the potential to be sooooo much worse

 

https://www.middleeasteye.net/news/saudis-plan-crude-oil-output-increase-begin-price-war-report

 

Saudi Arabia plans to increase its crude oil output next month to more than 10 million barrels a day in response to the collapse of its Opec+ alliance with Russia, Bloomberg News reported on Saturday.

Brent slid to its biggest daily loss in more than 11 years on Friday after Russia balked at Opec's proposed steep production cuts to stabilise prices hit by economic fallout from the coronavirus, and OPEC responded by removing limits on its own production, Reuters reported.

"Prices plunged because the Opec confab ended up being an epic fail on the part of all involved. Russia has clearly decided to employ a scorched earth approach to the oil market: every country for itself," John Kilduff, partner at Again Capital in New York, told Reuters.

The world’s biggest oil exporter then began a price war on Saturday by slashing the prices it sells crude into foreign markets by the most in at least 20 years, offering unprecedented discounts in Europe, the Far East and the US to entice refiners to purchase Saudi crude at the expense of other suppliers.

At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record of 12 million barrels a day, according to people familiar with the conversations who asked not to be identified to protect commercial relations, Bloomberg reported.

Brent futures had their its biggest daily percentage fall on Friday since December 2008, down $4.72, or 9.4 percent, to settle at $45.27 a barrel. It was Brent's lowest closing price since June 2017.

With demand being ravaged by the coronavirus outbreak, opening the taps may throw the oil market into chaos.

Other OPEC producers, including Iraq, Kuwait and the United Arab Emirates, will likely follow Saudi Arabia's move with steep cuts to their own oil prices for April, Reuters reported on Sunday.

“That’s the oil market equivalent of a declaration of war,” said a commodities hedge fund manager, asking not to be identified because of the sensitivity of the situation.

Negotiating chess game

The break in a three-year alliance between the Saudi-led oil cartel and Russia to support prices may be temporary. The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise. But if the collapse is lasting, oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years, the New York Times reported on Sunday.

“If a true price war ensues, there will be plenty of pain in the oil markets,” Badr Jafar, president of Crescent Petroleum, a United Arab Emirates oil company, told the Times. “Many will be bracing for the economic and geopolitical shocks of a low-price environment.”

The production increase and deep discounts mark a dramatic escalation by the Saudis after Russia rejected an ultimatum on Friday in Vienna at the Opec+ meeting to join in a collective production cut. After the talks collapsed, Russia indicated countries were free to pump-at-will from the end of March.

With jet fuel, gasoline and diesel consumption rapidly decreasing amid the economic impact of the coronavirus outbreak, the energy market now faces a simultaneous supply-and-demand shock.

After the failure in Vienna, Riyadh responded within hours by cutting its so-called official selling prices, offering record discounts for some of the crude it sells worldwide, according to a copy of the prices seen by Bloomberg News. Aramco has set the prices, but the official communication to clients is likely to come on Monday, a person familiar with the matter said.

The Saudi Energy ministry didn’t respond to a request for comment from Bloomberg.

Oil traders are looking to historical charts for an indication of how low prices could go. One potential target is $27.10 a barrel, reached in 2016 during the last price war. Some believe the market could go even lower.

“We’re likely to see the lowest oil prices of the last 20 years in the next quarter,” Roger Diwan, an oil analyst at consultant IHS Markit and a veteran OPEC watcher, told Bloomberg, implying that the price could fall below $20 a barrel.

9/10 fighting wars are fought for some economic reason.  This could easily explode into something very nasty.  

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11 minutes ago, Warhippy said:

Just saw it.  Hot damn that's a route in the making.  Apparently SA is willing to increase production via Saudi Aramco to 12+ million BPD

I guess the thinking there is they will take so much market share that even though they sell at lower prices their revenue will remain the same while everyone wilts and dies.

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Not great news for climate change. I wonder if Greta will book a trip to Riyadh  lol

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3 minutes ago, Shift-4 said:

Not great news for climate change. I wonder if Greta will book a trip to Riyadh  lol

On a private jet for sure.

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3 minutes ago, CBH1926 said:

On a private jet for sure.

lol

I have faith she will kayak there

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1 minute ago, Shift-4 said:

lol

I have faith she will kayak there

It would have to be kayak made out of anything but plastic.

I am thinking coconut shells, bamboo, hemp etc.

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So they are trying to eliminate the other competitors in the market.  Once they start getting more market shares, they're just going to jack up prices. 

They tried a few years back.... took out a few companies (many in Canada), but shale, fracking, etc industries has mostly adapted.  The ultimate winners in all this.... many industrial/manufacturing countries who now have very cheap energy prices.  

 

Anyone expecting another "random" scud missile (or multiple) to hit Saudi oil facilities?

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US futures are frozen, they can't trade below around 5%. Expect the drop tomorrow to be much worse, maybe 10% or more. It's going to be an insane day and I suspect the market may be halted. Oil could drop into 20's tomorrow. This is a double whammy opec + coronavirus. Saudi's and russia will destroy US oil and of course Canadian oil for good. Alberta is probably going to go bankrupt. Fun times...

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4 hours ago, nuckin_futz said:

OMFG Markets are open and it's absolutely carnage.

 

Oil opened at $34.73/barrel and immediately got destroyed down to $30.01. Currently $31.62 -24%

 

Brent crude about the same -24% ish

 

US stock futures pummeled down to the recent lows.

Yup, wcs like 18$

3 hours ago, Warhippy said:

If only a PM had the forethought at some point to create a national plan that would have created a Nation wide fund of that nature.

 

Like an energy program of some sort.

Lol more praise for PET. Except you forgot he increased the debt by more than 100% and always ran deficits except for 1 year.

3 hours ago, nuckin_futz said:

I guess the thinking there is they will take so much market share that even though they sell at lower prices their revenue will remain the same while everyone wilts and dies.

Exactly.

3 minutes ago, DonaldBrashear said:

US futures are frozen, they can't trade below around 5%. Expect the drop tomorrow to be much worse, maybe 10% or more. It's going to be an insane day and I suspect the market may be halted. Oil could drop into 20's tomorrow. This is a double whammy opec + coronavirus. Saudi's and russia will destroy US oil and of course Canadian oil for good. Alberta is probably going to go bankrupt. Fun times...

Then Canada will be in big trouble. 

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3 minutes ago, Ryan Strome said:

Yup, wcs like 18$

 

Actually $17.22.

 

Sadly you could fill the barrel with Coca Cola and it would be worth more. :(

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3 minutes ago, nuckin_futz said:

Actually $17.22.

 

Sadly you could fill the barrel with Coca Cola and it would be worth more. :(

Omg it's getting worse. Some are speculating 15$

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