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Title: Exclusive: Arab OPEC sources see oil back above $70 by end-2015
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URL Source: http://news.yahoo.com/exclusive-ara ... -above-075621149--finance.html
Published: Dec 23, 2014
Author: Rania El Gamal
Post Date: 2014-12-23 06:43:44 by Tatarewicz
Keywords: None
Views: 83
Comments: 5
Yahoo... ABU DHABI (Reuters) - Arab OPEC producers expect global oil prices to rebound to between $70 and $80 a barrel by the end of next year as a global economic recovery revives demand, OPEC delegates said this week in the first indication of where the group expects oil markets to stabilize in the medium term. The delegates, some of which are from core Gulf OPEC producing countries, said they may not see - and some may not even welcome now - a return to $100 any time soon. Once deemed a “fair” price by many major producers, $100 a barrel crude is encouraging too much new production from high cost producers outside the exporting group, some sources say. But they believe that once the breakneck growth of high cost producers such as U.S. shale patch slows and lower prices begin to stimulate demand, oil prices could begin finding a new equilibrium by the end of 2015 – even in the absence of any production cuts by OPEC, something that has been repeatedly ruled out. "The general thinking is that prices can’t collapse, prices can touch $60 or a bit lower for some months then come back to an acceptable level which is $80 a barrel, but probably after eight months to a year," one Gulf oil source told Reuters. A separate Gulf OPEC source said: "We have to wait and see. We don't see 100 dollars for next year, unless there is a sudden supply disruption. But average of 70-80 dollars for next year – yes.” The comments are among the first to indicate how big producers see oil markets playing out next year, after the current slump that has almost halved prices since June. Global benchmark Brent closed at around $60 a barrel on Monday. Their internal view on the market outlook will provide welcome insight to oil company executives, analysts and traders, who were caught out by what was seen by some as a shift in Saudi policy two months ago and have struggled since then to understand how and when the market will find its feet. NOT AGAIN For the past several months, Saudi officials have been making clear that the Kingdom’s oft-repeated mantra that $100 a barrel crude is a “fair” price for crude had been set aside, at least for the foreseeable future. At the weekend, Saudi Oil Minister Ali al-Naimi was blunt when asked if the world would ever again see triple-digit oil prices: “We may not.” Saudi Arabia, the world’s biggest exporter – and its close Gulf allies within the Organization of the Petroleum Exporting Countries (OPEC) – say it’s time for others, whether that is countries like major exporter Russia or U.S. shale drillers, to slow down; OPEC can no longer slash output, ceding market share, to spare them a downturn. As Naimi told the Middle East Economic Survey (MEES) in an interview this weekend: “It is not in the interest of OPEC producers to cut their production, whatever the price is.” Without OPEC to defend prices, oil entered a free-fall, but most of OPEC’s members are holding fast. At this point, intervening in the market would simply invite new rivals to carry on pumping crude, eroding OPEC’s market share without any guarantee of a sustained price recovery, another Arab oil source told Reuters on the sidelines of a meeting in Abu Dhabi of the Organization of the Arab Petroleum Exporting Countries (OAPEC). "Every time prices fall, we would be asked to cut," the source said. The second Gulf OPEC source reiterated that OPEC would not cut alone. Non-OPEC producers such as Russia, Mexico, Kazakhstan and "anyone producing more than one million barrels per day" should also cut or at least freeze their output if they wanted a stable market and better prices, the Gulf OPEC source said. NO PRICE TARGET To be sure, there is no suggestion that OPEC is targeting a specific price, or would want to do so. The group hasn’t had a formal price goal in about a decade, and Saudi Arabia has long maintained that it is only seeking price stability, not a set level. But it offers a convenient metric at a time when traders are struggling to figure out where and when markets will settle down. Asked about market signals OPEC is looking for to decide on whether the market is stabilizing or not, irrespective of the price, Naimi said: "The signals need time, one year, two years, three years. There is not one signal that we look to and say that's it... but for sure those who are the most efficient producers are the one who would rule the market in the future." Iraqi oil minister Adel Abdel Mehdi told Reuters in an interview on Monday he thought prices would stabilize now at about $60 a barrel but could rise to over $70 by mid-next year. "I believe that market has started to stabilize itself now," Falah al-Amiri, head of Iraq state oil marketing SOMO told Reuters in Abu Dhabi. "The future for next year, I don't think there would be much optimism in the market that the price would go to $80 or above. But I don't even think prices would reach $80," said Amiri, citing a resilient shale oil production to current prices. (Editing by William Maclean, Will Hardy and Jonathan Leff)
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#1. To: Tatarewicz (#0)
Here is how it is going to play out. The oil projects that are now stalled courtesy of the cheap oil glut are going to go by the way side. Oil prices are only down because Obama needs a reprieve for all the chaos and expense created by Obamacare. First quarter of 2015, oil is going to be well about $200.00 a barrel. Why? Because in February, when there is no recovery, and the people have been out of work from their seasonal jobs, the house of cards will come crashing down. Russia is having it's own firewalk right now, but I can assure you it will be nothing compared to what is about to befall the American People. The Dow hit 18,000 today. Highest it has ever been. "Call Me Ishmael" -Ishmael, A character from the book "Moby Dick" 1851. "Call Me Fishmeal" -Osama Bin Laden, A character created by the CIA, and the world's Hide And Seek Champion 2001-2011. -Tommythemadartist
Right now oil's at $56.19. “The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Never happen.
This story implies that low gas prices could be a long-term proposition: money.cnn.com/2014/12/22/...di-arabia-oil-production/ Saudi Arabia: We'll never cut oil production By John Defterios @CNNMoney December 22, 2014: 5:33 AM ET Saudi Arabia has a tough message for oil producers hurting from the price crash: We'll never cut our output. "We are going to continue to produce what we are producing, we are going to continue to welcome additional production if customers come and ask for it," al- Naimi said. The door now seems firmly closed to any move by OPEC to cooperate with Russia and other leading non-OPEC producers to reduce supply to a world market awash with oil. "If they want to cut production they are welcome, we are not going to cut, and certainly Saudi Arabia isn't going to cut," al-Naimi said. " [That] position we will hold forever, not [just] 2015."
#2. To: Tatarewicz (#0)
"The general thinking is that prices can’t collapse, prices can touch $60 or a bit lower for some months..."
#3. To: TommyTheMadArtist (#1)
First quarter of 2015, oil is going to be well about $200.00 a barrel.
#4. To: Tatarewicz (#0)
-Alex Kurtagic
#5. To: X-15 (#4)
PRESStv...OPEC will not cut output even at $20 per barrel Saudi Arabia says the Organization of the Petroleum Exporting Countries (OPEC) will not cut oil production even if the price falls to USD 20 a barrel. The kingdom’s Oil Minister Ali al-Naimi made the remarks in an interview with the weekly magazine the Middle East Economic Survey (MEES). "Whether it goes down to $20 a barrel, $40, $50, $60, it is irrelevant," said Naimi. The minister defended a decision made last month by OPEC, whose lead producer is Saudi Arabia, to continue a daily production cap of 30 million barrels. The decision caused global crude prices to fall further than the around 50 percent it had already dropped since June amid a global supply excess, a strong dollar and slower growth in demand. Naimi said OPEC was not surprised by the recent plummet of the price per barrel. "No, we knew the price would go down because there are investors and speculators whose job it is to push it up or down to make money," said Naimi. In addition, the Saudi minister said Persian Gulf nations and particularly his country “have the ability to hold out” with lower prices, adding other nations would be "harmed greatly before we feel any pain." Naimi also rejected calls to reduce production, saying it is “crooked logic” to expect Saudi Arabia to cut its production of 9.6 million barrels a day and then lose business to other non-OPEC producing countries. CAH/HMV/HRB Becoming more mysterious...
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