With wave of Iranian oil imminent, a shudder in Saudi Arabia

[webfact]

With wave of Iranian oil imminent, a shudder in Saudi Arabia
MARCY GORDON, AP Business Writer

WASHINGTON (AP) — A new wave of oil from Iran will flow into a global market awash in oil where prices are plunging to depths not seen in a dozen years. With a historic nuclear deal between Iran, the U.S. and five other world powers set into place this weekend, a European oil embargo on the world's seventh-largest oil producer will end.

The impact may be felt widely when crude begins trading in Asian markets Monday, but the return of Iran to global energy markets created tremors even before the first trade was made. Saudi Arabia's stock market plunged more than 5 percent Sunday. Saudi Arabia is the biggest oil producer within OPEC, the oil cartel with waning influence to which Iran also belongs.

Saturday was dubbed Implementation Day, when Iran was freed from international sanctions after being deemed as having dismantled most of its nuclear program under the deal established last summer. "Implementation Day for the nuclear agreement means a new oil day for Iran," Daniel Yergin, vice chairman of research firm IHS and author of a Pulitzer Prize-winning book on the history of oil, said Sunday.

The oil market has anticipated the unchained tide of Iranian oil for months, and some of that may be reflected in new lows for oil prices in the past week. U.S. crude oil prices have trended down for a year and a half, and have fallen almost 40 percent in just the past three months. On Friday, the price slid 6 percent to $29.42 a barrel. That compares with a high of over $100 a barrel in the summer of 2014, and close to $150 per barrel before the U.S. recession.

There are predictions of barrels going for $20 soon.

Falling crude prices have led to lower prices for gasoline, diesel, jet fuel and heating oil. This has helped boost consumer spirits and encourage spending, but may also have slowed the overall recovery of the U.S. economy last year as major energy companies slash investments and jobs. The astonishing fall of oil has created jitters globally as economic growth for a major consumer, China, ebbs. That has rippled to U.S. stock markets as well over apprehension that the economic contagion will spread.

For Iranian oil, a big question is how much and how fast. Already, some 38 million barrels of oil are in Iran's floating reserves, ready to enter the market, according to the International Energy Agency. Iran has signaled it aims to put as much as 1 million to 1.5 million barrels daily into the market. But the IEA estimates that 400,000 to 500,000 barrels a day is more likely; some experts see 300,000 or so barrels coming in during the next six months.

In any amount, "it's coming at a time when the market is still oversupplied," said Larry Goldstein, director of the Energy Policy Research Foundation, who predicted a decline in oil in 2014.

That could mean even more acute pressure on U.S. oil drilling companies to cut back on new projects and jobs.

It's hard to know precisely what shape Iran's oil fields are in. The IEA estimates that Iran's crude oil production capacity at 3.6 million barrels a day, which is 800,000 more than current levels produced.

"We will try to maximize our crude export capacity to Europe and restore 42 percent to 43 percent share in the European market before the sanctions were imposed," Mohsen Qamsari, director of international affairs at Iran's national oil company, was quoted as saying in Iran's official news agency.

The fight for control of global oil markets in OPEC and outside of the cartel is entering a new phase, according to Yergin.

Nothing is certain, however, as a new global landscape for energy emerges. Among the biggest wild cards right now is OPEC member Venezuela, which "is about to fall apart," said energy economist Philip Verleger.

New economic data from the country's central bank shows an economy in shambles and annualized inflation surging into triple digits. Experts say Venezuela is dangerously close to just breaking even on the oil it produces, which accounts for 95 percent of export earnings.

A major power failure in the fall knocked out its biggest oil refining complex. Lost production could offset a 300,000-barrel-per-day increase by Iran, Verleger said.


-- (c) Associated Press 2016-01-18

[OMGImInPattaya]

Couldn't happen to a nicer group of people ?

[i claudius]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

[webfact]

Oil Prices Tumble on Iran Supply Glut Fears
BY JACOB MASLOW


Graphic of Oil Prices

The price of oil tumbled today to new 12 year lows as traders engaged in a panic sell-off, fearful that the re-entry of Iran to the international market would lead to a further fall in prices in an already grossly oversupplied market.

US WTI crude was trading down 1.5% in the early Asian session, hovering around $28.99 per barrel. These prices have not been seen since 2003.

International sanctions which have locked Iran out of the international markets were lifted this weekend, as ties between them and the US warmed significantly after a historic prisoner swap.

Full story: http://www.streetwisejournal.com/oil-prices-tumble-on-iran-supply-glut-fears/


-- StreetWiseJournal 2016-01-18

[Gsxrnz]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

[sandyf]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

Also ask yourself why the US lifted the ban on exporting oil just before the sanctions were lifted. All eyes on Iran and the US move slips under the radar.

If the US had any concern over the over supply they wouldn't be exporting. Certainly some manipulation going on.

[craigt3365]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

Also ask yourself why the US lifted the ban on exporting oil just before the sanctions were lifted. All eyes on Iran and the US move slips under the radar.

If the US had any concern over the over supply they wouldn't be exporting. Certainly some manipulation going on.

Just speculating. But it'd be interesting if the Iranian deal got done to release this oil and punish Saudi Arabia for the problems they've caused the US fracking companies. These companies are but a small fraction of the overall US economy. Oil is the life blood of the SA economy. Could be absolutely devastating for them if oil hit $20 a barrel and stayed there for 2 years. Interesting...

[bark]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

USA, Russia, Canada, UK , ( Scotland ) oh and Thailand. Plus 10 countries in Africa.

Do your research, Mr. American hater.

[Srikcir]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

Also ask yourself why the US lifted the ban on exporting oil just before the sanctions were lifted. All eyes on Iran and the US move slips under the radar.

If the US had any concern over the over supply they wouldn't be exporting. Certainly some manipulation going on.

Just speculating. But it'd be interesting if the Iranian deal got done to release this oil and punish Saudi Arabia for the problems they've caused the US fracking companies. These companies are but a small fraction of the overall US economy. Oil is the life blood of the SA economy. Could be absolutely devastating for them if oil hit $20 a barrel and stayed there for 2 years. Interesting...

Saudi oil costs $10 per barrel to produce so at $20 per barrel it still makes a profit. Hardly "devastating."

The issue for Saudi Arabia now is that for the last two decades it has financed economic growth based on $70 per barrel. So it must rebudget its economy by scaling down its social welfare programs and/or turn to new sources of revenue such as increased gasoline prices.

[Credo]

The nuclear deal that ultimately resulted in the lifting of sanctions was a long, long time in the making. I don't think there is any manipulation going on.

It would be fairly difficult to have everyone sign the deal and then tell Iran that because of the world oil glut the sanctions on oil would remain.

Meanwhile, I will enjoy some good pistachio nuts from Iran and maybe buy a new Persian rug.

[Gsxrnz]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

USA, Russia, Canada, UK , ( Scotland ) oh and Thailand. Plus 10 countries in Africa.

Do your research, Mr. American hater.

Not an American hater - perhaps you should put the safety catch back on.

My comments related to the manipulators that have made these moves - in this it just happens to be America, but I have no doubt there will be British, Swiss, Dutch, and Germans involved as well - they usually all are.

Look at the way the middle east was carved up post WWII by the Brits, Dutch and Americans to secure great wealth - not for the countries, but for the select few that were able to manipulate the contracts. And we're talking royal families and oil magnates.

Similar manipulations are occurring now.

[Chicog]

Saudi oil costs $10 per barrel to produce so at $20 per barrel it still makes a profit. Hardly "devastating."

The issue for Saudi Arabia now is that for the last two decades it has financed economic growth based on $70 per barrel. So it must rebudget its economy by scaling down its social welfare programs and/or turn to new sources of revenue such as increased gasoline prices.

I don't really think Saudi is going to cover a $100Bn+ deficit by raising petrol prices, and it doesn't have a lot else to sell other than sand.

And too many cuts to social programs will cause major unrest. It has an unhealthily young population.

[craigt3365]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

Also ask yourself why the US lifted the ban on exporting oil just before the sanctions were lifted. All eyes on Iran and the US move slips under the radar.

If the US had any concern over the over supply they wouldn't be exporting. Certainly some manipulation going on.

Just speculating. But it'd be interesting if the Iranian deal got done to release this oil and punish Saudi Arabia for the problems they've caused the US fracking companies. These companies are but a small fraction of the overall US economy. Oil is the life blood of the SA economy. Could be absolutely devastating for them if oil hit $20 a barrel and stayed there for 2 years. Interesting...

Saudi oil costs $10 per barrel to produce so at $20 per barrel it still makes a profit. Hardly "devastating."

The issue for Saudi Arabia now is that for the last two decades it has financed economic growth based on $70 per barrel. So it must rebudget its economy by scaling down its social welfare programs and/or turn to new sources of revenue such as increased gasoline prices.

Plenty of reports out there they are running a budget deficit. And that was at last year's prices. $20 will have them in an even worse shape. They're spending too much money....

[impulse]

Saudi oil costs $10 per barrel to produce so at $20 per barrel it still makes a profit. Hardly "devastating."

The issue for Saudi Arabia now is that for the last two decades it has financed economic growth based on $70 per barrel. So it must rebudget its economy by scaling down its social welfare programs and/or turn to new sources of revenue such as increased gasoline prices.

That's like saying it only costs me $2.50 to get to work in the morning, and another $10 for lunch, so any salary above $15 a day should be just fine, and a 50% cut in my pay wouldn't be devastating.

Problem is, my mortgage and car payments and health care and breakfast and dinner, and.. and...

Just like Saudi's social welfare programs, which are in effect a protection (extortion would be an accurate characterization) payment to keep their masses from revolting.

[OMGImInPattaya]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

And weren't we all supposed to be dead of starvation from over-population like 30 years ago too

[Credo]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

And weren't we all supposed to be dead of starvation from over-population like 30 years ago too

Yes, but GMO's took care of that problem.

[saakura]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

And weren't we all supposed to be dead of starvation from over-population like 30 years ago too

Yes, but GMO's took care of that problem.

Similarly, alternate sources of energy like wind and solar will come in.

[F430murci]

So ask yourself why the sanctions were lifted at the worst possible time in terms of supply, demand. and price. It seems the world manipulators will go to any length to see the whole middle eastern oil supply chain and political situation break down.

Might be a good time to buy oil futures at less than $20, because when the shi-ite hits the fan, there will suddenly be a world shortage of oil.

And guess who has the next biggest suppiy capabilities, and whose whole energy economy is hugely at risk at oil that is under $65......gosh, not the US?

Also ask yourself why the US lifted the ban on exporting oil just before the sanctions were lifted. All eyes on Iran and the US move slips under the radar.

If the US had any concern over the over supply they wouldn't be exporting. Certainly some manipulation going on.

Just speculating. But it'd be interesting if the Iranian deal got done to release this oil and punish Saudi Arabia for the problems they've caused the US fracking companies. These companies are but a small fraction of the overall US economy. Oil is the life blood of the SA economy. Could be absolutely devastating for them if oil hit $20 a barrel and stayed there for 2 years. Interesting...

You may or may not recall, but I predicted or stated that US and OPEC would release reserves (even indicated the amount of barrels per month they needed to release) and drive oil prices down to pressure Putin over Ukraine well before MH 17, maybe May or June 2014 timeframe.

US continued to release reserves well after supply exceeded demand and prices began to nose dive. Putin devalued ruble to hedge so more reserves were released and production was increased.

Fast forward. Here is where Obama in Obana like short sighted fashion failed to see that OPEC would take this as an opportunity to crush US domestic production by continuing to drives prices down. The short term is very cheap gas in the US so Ibama takes credit for that to save face and divert attention from the long term consequences of permitting absolute destruction of further de elopement of domestic production and less future reliance on foreign oil.

The net impact is more future reliance on OPEC and future higher prices with less domestic production and price control. Say hello to inflation . . . By that time Obama will be out of office and the blame will be placed on the new administration.

This will have a large impact on the US. Perhaps not this year or 5 years from now, but within the next ten years US will be at the mercy of OPEC and unable to ramp up domestic production again for a very long time, if ever. The ventures will be considered to risky for banks to finance lest the cycle we see now repeat itself.

[Thunder26]

It is ironic as I used to study from very smart books in early 2000' that oil would be depleted by 2020, What a load of rubbish! Don't believe whatever you read. Books are written by people who have no idea what they are talking about.

To be fair this is a great surprise for me as well when it comes to the oil price drop. This is quite incredible.

[Andaman Al]

Interesting scenarios now coming up, but I don't see much evidence of cheaper airfare and prices at the gas station! Anyone living in the UK or USA? Have prices come down at the gas pumps? The Government were quick enough to put prices up.

[F430murci]

Interesting scenarios now coming up, but I don't see much evidence of cheaper airfare and prices at the gas station! Anyone living in the UK or USA? Have prices come down at the gas pumps? The Government were quick enough to put prices up.

Yes. Down to around $1.60 ish for regular and $2.0X for premium.

[Andaman Al]

Interesting scenarios now coming up, but I don't see much evidence of cheaper airfare and prices at the gas station! Anyone living in the UK or USA? Have prices come down at the gas pumps? The Government were quick enough to put prices up.

Yes. Down to around $1.60 ish for regular and $2.0X for premium.

Nice Murci

What was it up at?

[F430murci]

Interesting scenarios now coming up, but I don't see much evidence of cheaper airfare and prices at the gas station! Anyone living in the UK or USA? Have prices come down at the gas pumps? The Government were quick enough to put prices up.

Yes. Down to around $1.60 ish for regular and $2.0X for premium.

Nice Murci

What was it up at?

Cannot remember. Upper $3s for sue not that long ago.

[steve187]

uk fuel prices are at the lowest since 2009.

[sandyf]

Interesting scenarios now coming up, but I don't see much evidence of cheaper airfare and prices at the gas station! Anyone living in the UK or USA? Have prices come down at the gas pumps? The Government were quick enough to put prices up.

Saw this last week, no escape.

"Now with oil at a 12 year low, below $30 a barrel, how can airlines possibly be hitting passengers with a surcharge for jet fuel?

The point is they aren't."

http://www.bbc.com/news/business-35311224

[augustwest]

The nuclear deal that ultimately resulted in the lifting of sanctions was a long, long time in the making. I don't think there is any manipulation going on.

It would be fairly difficult to have everyone sign the deal and then tell Iran that because of the world oil glut the sanctions on oil would remain.

Meanwhile, I will enjoy some good pistachio nuts from Iran and maybe buy a new Persian rug.

Pistachios from Aegina Greece are the best

[manfredtillmann]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

i do NOT like your post, i think you are on a completely different and wrong path.

time will tell, but when it tells it will be too late.

enjoy your last days...

[rijit]

The next big issue is when do

companies stop pumping oil because its Losing money?

Sent from my GT-I9000 using Thaivisa Connect Thailand mobile app

[rijit]

Just goes to show all those doom merchants who told us oil was running out were about as accurate as the "global warming is here" crowd are , at the end of the day its all about making money ,whether your Al Gore or the big oil company's , and a load of tree huggers believe all they are told , new windmill anyone?

i do NOT like your post, i think you are on a completely different and wrong path.

time will tell, but when it tells it will be too late.

enjoy your last days...

Yep not the.brightest.of posts.or as.hes .proving time. And tine again.not the brightest of posters

Sent from my GT-I9000 using Thaivisa Connect Thailand mobile app

[Usernames]

Peak oil. Right.