'Irresponsible' non-Opec output behind oil price plunge: UAE

[Lite Beer]

'Irresponsible' non-Opec output behind oil price plunge: UAE

ABU DHABI (AFP) - "Irresponsible" levels of output by producers from outside the Opec oil cartel is among the main causes of the slump in prices, the United Arab Emirates energy minister charged Sunday.

"One of the main causes is irresponsible production by some producers from outside the organisation, some of whom are newcomers," Suhail al-Mazrouei told an energy forum in Abu Dhabi.

Mazrouei said the sharp drop in prices will impose a "major economic burden" on oil producing countries, insisting nonetheless that Opec’s decision last month to maintain output levels was "correct."

"Opec’s decision, which aims to provide the market with time to rebalance, is correct, strategic and useful to the global economy," he said at the forum organised by the Organisation of Arab Petroleum Exporting Countries.

The Opec decision will "lead to stability in oil prices," he said.

World prices have fallen almost 50 per cent since June, mainly due to a supply glut, the weak global economy and a strong US dollar.

Source: http://www.nationmultimedia.com/breakingnews/Irresponsible-non-Opec-output-behind-oil-price-plu-30250340.html

-- The Nation 2014-12-21

[terryp]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world

[rijb]

By their logic, wars must be necessary to maintain population levels.

[NeverSure]

LOL. Which is it, UAE? Countries outside of Opec are responsible, or Opec made the right decision to pump all-out? The OP says it's both, in an about face.

UAE, You are a member of Opec. All of the Opec countries plus Russia depend on oil to feed their people. You all need about $100 oil to make enough money to feed your people and sustain your oil-driven economies.

You've have the world by the balls since the 1960's. Some don't remember the deliberate Opec stunt of causing a global oil shortage in the 1970's and having gasoline stations around the world out of gasoline while the price skyrocketed.

Now you have competition outside of Opec, the shoe is on the other foot and you don't like losing your monopoly.

I can't keep my eyes dry.

[smedly]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world

actually you are close

the slump in oil price was by design to bring pressure on Putin Russia and the rouble - I believe it is working

[rijb]

Players with proven oil reserves.

[dogleg]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world:whistling:

actually you are close

the slump in oil price was by design to bring pressure on Putin Russia and the rouble - I believe it is working

...And pressure on Iran. Kind a nice to screw with Russia, Iran and IS at the same time.

[Chicog]

Dubai is talking about raising water and electricity prices. If you think Double Pricing is bad......

[impulse]

Players with proven oil reserves.

Partly true. But you need to remember the "proven reserves" are generally defined (for financial valuation purposes) as reserves that can be produced economically at existing prices and current cost of production.

A big swing in pricing will significantly change the "proven reserves" for each country.

That's why I get a kick out of the conspiracy theorists who scream about how Big Oil's reserves always go up when the price is higher, and go down when they're not getting the high price. It's not a conspiracy. It's an accounting standard.

[rijb]

Hence, the point of the article.

[impulse]

Hence, the point of the article.

Clicked the links and see what you mean.

But they seem to be mixing the terms "oil reserves" and "government (monetary) reserves" without a good segue.

Saudi Arabia may run out of money in their government monetary reserves by 2018 if the price stays low.

But they won't run out of oil reserves. Their cost of production is pretty low.

The operating cost (stripping out capital expenditure) of extracting a barrel in Saudi Arabia has been estimated to be around $1-$2, and the total cost (including capital expenditure) $4-$6 a barrel.

Source: http://www.reuters.com/article/2009/07/28/oil-cost-factbox-idUSLS12407420090728

But that oil money has to support a lot of spending, and I shudder to think what's going to happen if the natives get (even more) restless as the coffers go dry.

Hopefully, Putin will back off by 2018 and the secret agreement between the House of Saud and the House of Bush (et.al) will fade back into the background. (Source: Smedly in post #5)

Edited December 21, 2014 by impulse

[Credo]

I think there is more to this than meets the eye. I can't see a bunch of countries getting together to screw with another country or two (Russia and Iran) at their own expense. What is the gain for Opec?

The political tit-for-tat between Russia and NATO surely can't be precipitating all of this.

[chooka]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world

actually you are close

the slump in oil price was by design to bring pressure on Putin Russia and the rouble - I believe it is working

your both wrong it was prayuth's new years gift to the Thai people.

[rijb]

I think there is more to this than meets the eye. I can't see a bunch of countries getting together to screw with another country or two (Russia and Iran) at their own expense. What is the gain for Opec?

The political tit-for-tat between Russia and NATO surely can't be precipitating all of this.

Maybe it's a war without bullets.

Who knows what evil lurks in the virtual world.

[Emster23]

Maybe they could emulate the rubber tree owners here in Thailand and go protest about those pesky laws of supply and demand. I was around during oil embargo in US in 73, and I am enjoying this no end. Karma bit you on your backsides?

[NanLaew]

It is easy for the more significant OPEC members to cap production but for the likes of Venezuela and Nigeria, both OPEC players, the fall in oil prices has been devastating. I think that UAE should be checking for 'leaking pipes' inside their own organization, rather than point fingers at some unnamed, non-OPEC producers.

[yankee99]

I think there is more to this than meets the eye. I can't see a bunch of countries getting together to screw with another country or two (Russia and Iran) at their own expense. What is the gain for Opec?

The political tit-for-tat between Russia and NATO surely can't be precipitating all of this.

Saudi who leads opec has bad blood for iran and no love for russia. It also has a interest in hurting the usa shale producers.

[Jimbo2014]

Boo Hoo. God forbid they might actually have to work for a living now... do something creative or productive! - sure to be a system shock

[Steely Dan]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world

actually you are close

the slump in oil price was by design to bring pressure on Putin Russia and the rouble - I believe it is working

The Saudis have a beef with Russia for their support of Syria, but they also have one with Obama for relaxing sanctions on Iran. An oil glut hurts the Middle East ôil states but it also hits the high cost oil extraction companies in the U.S which have borrowed considerably.

[Loptr]

more PR garbage this is being caused by SAUDI who are the founding member of OPEC ........the SAUDIS voted only 2 weeks ago NOT TO CUT production..so the UAE are talking out of their collective a**** ...guess it must be russia to blame yet again , at this rate Putin will be the cause of all the cancer in the world

OPECs comments are directed to the US and Russian production... US production surpassed Saudi's a few months ago...

Now it's a matter of who flinches first...

[RigPig]

They are just worried that the world may not depend on them anymore, which is a good thing. The shale oil projects are working fine and producing with a profit, however if there is a glut on the market and the price falls the shale oil projects may not be so economical, which is what OPEC are hoping for.

If the king of Saudi forwent his cut for a year there would be more than enough to support the country for the foreseeable future.....

[Anthony5]

LOL. Which is it, UAE? Countries outside of Opec are responsible, or Opec made the right decision to pump all-out? The OP says it's both, in an about face.

UAE, You are a member of Opec. All of the Opec countries plus Russia depend on oil to feed their people. You all need about $100 oil to make enough money to feed your people and sustain your oil-driven economies.

You've have the world by the balls since the 1960's. Some don't remember the deliberate Opec stunt of causing a global oil shortage in the 1970's and having gasoline stations around the world out of gasoline while the price skyrocketed.

Now you have competition outside of Opec, the shoe is on the other foot and you don't like losing your monopoly.

I can't keep my eyes dry.

Must be a big inflation in that part of the world, because until about 6 years ago they were able to feed their people with oil below 30$ .

Looks more like an outsider, who jacked up the price for years by igniting wars everywhere, needs 100$ to feed its people, and current policies don't play out to well for them.

[NeverSure]

LOL. Which is it, UAE? Countries outside of Opec are responsible, or Opec made the right decision to pump all-out? The OP says it's both, in an about face.

UAE, You are a member of Opec. All of the Opec countries plus Russia depend on oil to feed their people. You all need about $100 oil to make enough money to feed your people and sustain your oil-driven economies.

You've have the world by the balls since the 1960's. Some don't remember the deliberate Opec stunt of causing a global oil shortage in the 1970's and having gasoline stations around the world out of gasoline while the price skyrocketed.

Now you have competition outside of Opec, the shoe is on the other foot and you don't like losing your monopoly.

I can't keep my eyes dry.

Must be a big inflation in that part of the world, because until about 6 years ago they were able to feed their people with oil below 30$ .

Looks more like an outsider, who jacked up the price for years by igniting wars everywhere, needs 100$ to feed its people, and current policies don't play out to well for them.

If you're taking a crack at the US again, you'd be wrong.

OPEC and Russia run their economies and feed their people with oil money. In the US the oil companies are private with only private capital at risk. That oil feeds only stockholders.

The US has a diversified economy that doesn't rely on oil production. The other countries don't. Oil is only a bonus for the US.

There is a hell of a big difference between a country going broke and a privately capitalized oil company going broke. The US itself isn't at risk over this oil debacle but Russia and OPEC countries are.

Now I'd like to see some numbers showing that OPEC countries can sustain their budgets with $30 oil. It's obvious that Russia can't with $60 oil.

[wabothai]

Wouldn't it be nice to see all of them drive beetles?

[harryfrompattaya]

The OPEC produces try to go against the world bankers and the Rothchilds now they are being taught a lesson in finance

You can not go against the World Bankers who been in power for aver 250 years

OPEC is now defeated by the World Bankers

Edited December 22, 2014 by harryfrompattaya

[NeverSure]

The OPEC produces try to go against the world bankers and the Rothchilds now they are being taught a lesson in finance

You can not go against the World Bankers who been in power for aver 250 years

OPEC is now defeated by the World Bankers

Yeah, right. Thank you.

I'll make a note of that as soon as I get to a pad and pencil.

[daveAustin]

I hope it falls through the floor. It'll hurt everyone, no doubt, but more so the bigwigs and overpaid workers. The world needs to move away from oil.

[Benmart]

Maybe they could emulate the rubber tree owners here in Thailand and go protest about those pesky laws of supply and demand. I was around during oil embargo in US in 73, and I am enjoying this no end. Karma bit you on your backsides?

I remember the oil embargo. My car was shipped from Bremerhaven, Germany to Bayonne, New Jersey. The military port gas station gave me 5 gallons of gasoline when my car was off-loaded and said good luck.

I got a full tank some miles away, only because I had foreign license plates. Made it to California with more closed/no gas/long line stations all the way to the Bay Area.

An interesting time which we may see again.

[utkb]

This has nothing to do with market manipulation, irresponsible behavior or any other conspiracy.

It is simply free markets and supply and demand at work.

A nice article I read pointed out that in 2010 or so the US imported several million bpd of oil from countries like Nigeria. Now with the US thinking of exporting production, this oil is on the open market and OPEC (rightly so) is worried about losing their customers. Hence they aren't going to cut production forcing their existing customers to sign up elsewhere.

One thing to look for is China recreating the US success in frac'ing. They've had some success and internal oil production is on the rise.

When the Chinese become successful at frac'ing that will mean more oil available on the open market.

It looks like the world is in for at least a decade of greater supply than demand, and hence softer prices.

Countries like Russia, Iran, and Venezuela are screwed, not by anyone's design, just be luck of the cards.

[utkb]

LOL. Which is it, UAE? Countries outside of Opec are responsible, or Opec made the right decision to pump all-out? The OP says it's both, in an about face.

UAE, You are a member of Opec. All of the Opec countries plus Russia depend on oil to feed their people. You all need about $100 oil to make enough money to feed your people and sustain your oil-driven economies.

You've have the world by the balls since the 1960's. Some don't remember the deliberate Opec stunt of causing a global oil shortage in the 1970's and having gasoline stations around the world out of gasoline while the price skyrocketed.

Now you have competition outside of Opec, the shoe is on the other foot and you don't like losing your monopoly.

I can't keep my eyes dry.

The UAE (Abu Dhabi more specifically - where I live) probably needs about $30 per bbl to balance their budget. They're one the best regional examples of investing in their local infrastructure and building a massive private wealth fund to support their needs.

Not saying their happy about losing 100's of millions of $ per day, just won't effect them that much.