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Saudi Arabia Sees Oil Prices Stabilizing Around $60 a Barrel

LONDON—OPEC’s biggest oil producer, Saudi Arabia, now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation. The shift in Saudi thinking suggests the de facto leader of the Organization of the Petroleum Exporting Countries won’t push for supply cuts in the near-term, even if oil prices fall further. Brent crude dropped 62 cents a barrel to $69.92 on Wednesday. The change in Saudi mind-set also suggests OPEC members may have to adapt swiftly to shifts in the oil market caused by a surge in supply from the U.S. shale revolution and slowing global demand growth. As recently as early November, OPEC officials were talking about $70 a barrel as the sustained level at which there would be “panic” within its ranks. Saudi Oil Minister Ali al-Naimi before last week’s […]

Posted On : Published By : Tom Whipple
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Saudi Arabia Seen Widening Asia Oil Discount on Shale Surge

Saudi Arabia will probably deepen discounts for crude supplies to Asia after leading OPEC to maintain the group’s output target amid a global battle for market share. The world’s biggest oil exporter will announce January official selling prices to buyers in Asia this week, after lifting its Arab Light grade from the lowest level in almost six years a month earlier. The largest producer in the Organization of Petroleum Exporting Countries may offer bigger discounts, according to 12 of 13 respondents in a Bloomberg News survey of traders. One participant forecast differentials to be unchanged. Saudi Arabia is discounting its crude as OPEC’s decision to maintain production quotas prompts speculation the group is prepared to let prices fall to defend its market share against more expensive U.S. shale output. Benchmark futures contracts have collapsed almost 40 percent from a June peak as competition between suppliers increased amid slowing demand. […]

Posted On : Published By : Tom Whipple
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Saudi Arabia Sees Oil Prices Stabilizing Around $60 a Barrel

LONDON—OPEC’s biggest oil producer, Saudi Arabia, now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation. The shift in Saudi thinking suggests the de facto leader of the Organization of the Petroleum Exporting Countries won’t push for supply cuts in the near-term, even if oil prices fall further. Brent crude dropped 62 cents a barrel to $69.92 on Wednesday. The change in Saudi mind-set also suggests OPEC members may have to adapt swiftly to shifts in the oil market caused by a surge in supply from the U.S. shale revolution and slowing global demand growth. As recently as early November, OPEC officials were talking about $70 a barrel as the sustained level at which there would be “panic” within its ranks. Saudi Oil Minister Ali al-Naimi before last week’s […]

Posted On : Published By : Tom Whipple
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Saudi Oil Minister: Oversupply Not Unusual; No Comment on Any OPEC Move

Saudi Arabian Oil Minister Ali al-Naimi is surrounded by reporters as he arrives at his… ENLARGE Saudi Arabian Oil Minister Ali al-Naimi is surrounded by reporters as he arrives at his hotel Monday for this week’s OPEC meeting. Reuters VIENNA—Saudi Arabia’s oil minister on Monday suggested current high levels of supply in global oil markets aren’t unusual, but declined to comment on the kingdom’s likely stance at this week’s crucial meeting of the Organization of the Petroleum Exporting Countries. Speaking to reporters as he arrived in Vienna ahead of Thursday’s OPEC gathering, Ali al-Naimi asked, “Is this the first time we have oversupply?” That came in response to a question about the current balance between supply and demand in oil markets. Some OPEC members, such as Venezuela, have been calling for several months for the group to cut its oil production following a 30% fall in oil prices. But […]

Posted On : Published By : Tom Whipple
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Oil-Price Slide Won’t Deter Saudi Aramco From Expansion Strategy

Saudi Arabian Oil Co. will push ahead with plans to expand and integrate its refining and chemicals businesses even amid the decline in oil prices, Chief Executive Officer Khalid Al-Falih said. The state-run oil company , known as Saudi Aramco , has a target of producing petrochemicals from 10 percent of all crude processed at its refineries, he said at an industry conference in Dubai. Oil producers in the Persian Gulf can withstand a period of low crude prices because countries in the region are fiscally strong, Al-Falih said. Brent crude , a global benchmark, has tumbled 30 percent this year. “For a refiner to be profitable, integration with petrochemicals is very essential,” he said today. Middle Eastern oil and natural gas producers are expanding petrochemical and refining operations to make fuel and other products that fetch higher prices than crude. Boosting petrochemical output is a long-term strategy for […]

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Islamic State leader urges attacks in Saudi Arabia: speech

BEIRUT (Reuters) – Islamic State leader Abu Bakr al-Baghdadi called for attacks against the rulers of Saudi Arabia in a speech purported to be in his name on Thursday, saying his self-declared caliphate was expanding there and in four other Arab countries. Baghdadi also said a U.S.-led military campaign against his group in Syria and Iraq was failing and he called for "volcanoes of jihad" the world over. Reuters could not independently confirm the authenticity of the speech – an audio recording carried on Islamic State-run social media. The voice sounded similar to a previous speech delivered by Baghdadi in July in a mosque in the Iraqi city of Mosul, the last time he spoke in public. The speech followed contradictory accounts out of Iraq after U.S. air strikes last Friday about whether he was wounded in a raid. U.S. officials said on Tuesday they could not confirm whether […]

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Saudi oil chief dismisses ‘price war’ claims

Pump jacks and wells are seen in an oil field on the Monterey Shale formation, California (Photo by David McNew/Getty Images) ©Getty Saudi Arabia’s oil minister broke months of silence on Wednesday to speak publicly about the Gulf nation’s stance on the oil market and dismiss claims that it had triggered a “price war”. Ali al-Naimi kept quiet on whether Saudi Arabia would cut output to remove surplus oil from the market in response to dramatically lower Brent crude prices, which are now around the $80 a barrel mark – a four-year low. But he said the country was working “with other producers to ensure price stability for the interest of producers, consumers and the industry at large”, according to Reuters. Oil market watchers have been holding out for comments from the minister of Opec’s largest producer ahead of a gathering of the cartel’s members later on this month. […]

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Saudis Reject Talk of OPEC Market Share War as Oil Slides

Related Brent Oil May Rise If OPEC Maintains Level: Goldman Saudi Arabia’s oil minister dismissed talk of a price war as having “no basis in reality” in his first public comments since crude plunged into a bear market last month. “Saudi oil policy has remained constant for the past few decades and it has not changed today,” Ali al-Naimi said at a conference in Acapulco , Mexico , yesterday. “We want stable oil markets and steady prices, because this is good for producers, consumers and investors.” Brent crude futures plunged below $80 yesterday for the first time since September 2010 on concern OPEC is in no hurry to halt a four-month slide in prices. Saudi discounts offered to Asian customers in October triggered speculation that the Organization of Petroleum Exporting Countries’ largest member had changed policy and was seeking to preserve market share, instead of supporting prices by curbing […]

Posted On : Published By : Tom Whipple
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Saudi Arabia is trying to sabotage America’s shale oil boom

4708 Votes Saudi Arabia is trying to sabotage America’s shale oil boom We’ve been here before. By “here,” I mean Saudi Arabia throwing its weight around in the global oil markets and triggering what we can only call a kind of reverse oil shock as a result. The consequences were particularly visible last Tuesday, when Saudi Arabia slashed the price at which it is willing to export crude oil to the United States, even as it boosted prices to buyers in Europe and Asia. That sent the benchmark U.S. crude oil price — West Texas Intermediate — skittering down to $76.45 a barrel, a level not reached in three years. Welcome back to the geopolitics of oil. If you thought that crude oil prices were set simply by what is happening to the global economy — the forces of supply and demand, and the answers to pressing questions such […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia is trying to sabotage America’s shale oil boom

4708 Votes Saudi Arabia is trying to sabotage America’s shale oil boom We’ve been here before. By “here,” I mean Saudi Arabia throwing its weight around in the global oil markets and triggering what we can only call a kind of reverse oil shock as a result. The consequences were particularly visible last Tuesday, when Saudi Arabia slashed the price at which it is willing to export crude oil to the United States, even as it boosted prices to buyers in Europe and Asia. That sent the benchmark U.S. crude oil price — West Texas Intermediate — skittering down to $76.45 a barrel, a level not reached in three years. Welcome back to the geopolitics of oil. If you thought that crude oil prices were set simply by what is happening to the global economy — the forces of supply and demand, and the answers to pressing questions such […]

Posted On : Published By : Tom Whipple