In our previous article (Crisis of Capitalism? Two Missing “Black Swan” Events), we envisioned that the combined weak western and global economies coupled with the Coronavirus COVID-19 pandemic and, then crowned by the Saudi/Russian/UAE flooding of the oil market to crash prices and drive out the US Shale oil producers, could devastate the US and global economies. We Continue reading “Did OPEC Bite Off More Than It Can Chew?”
Not only are the current views contradictory but each is supported by arguments and evidence, which increases the confusion and frustration of anxious listeners worried about their economic future. Continue reading “Are Oil Prices Rising or Falling?”
MARSAL COMMENTS: Russian scientists have announced a new invention that increases oil well productivity and capacity by six times! They have invented a new “Fracking” method that increases shale oil production by 1.7 to 6 times, and in some Continue reading “OOPS… Oil Supply could increase 6 times!”
DAILY BASKET – NEWS COMMENTARY
HAVE OIL PRICES TURNED DOWN?
MARSAL COMMENTS: Last week was horrible for oil. Prices fell approx. 8% with WTI breaking below US$ 50 and Brent below US$ 53. Speculators seem to have become pessimistic and liquidated their long positions. Will they now turn bearish and short oil? Continue reading “HAVE OIL PRICES TURNED DOWN?”
The Oil Drama
Heaps of oil analysis, bigger heaps of opinions and a flood of conclusions ranging from the possible to the impossible. It is beginning to seem as though everyone is blind, or running in a pitch-dark tunnel with no idea where the exit is. Continue reading “The Oil Drama”
The Oil Wolves are at the Gates
Before the ink was dry on the OPEC production accord, the Shale oil producers pounced on the futures market, selling forward all or a big part of their 2017 and 2018 production. The prices they sold at were above US 55 per barrel, and possibly near $ 60. (Actually, they had started selling Continue reading “The Oil Wolves are at the Gates”
OIL WARS – The Coming New Disaster?
By: Marwan Salamah*
Dec 25, 2014
If protecting market share is OPEC’s primary objective in not reducing oil production, and if oil prices remain depressed or continue their downward journey over the next few months, then it becomes only a matter of time before OPEC members begin to pounce on each other’s market shares and on non-OPEC shares.
In such a scenario, the outcome is likely to be in favor of whoever has the lowest cash production costs and the highest surplus funds to weather the oil revenues squeeze. Of the big producers, Saudi Arabia and Kuwait are the best positioned to win such a price war and Venezuela and Nigeria are likely to be the biggest losers followed at some distance by Iran, Iraq and then Russia.
There are many possible outcomes. One is where Venezuela goes bankrupt and implodes politically. This could lead to government change, which probably is not an unwelcome outcome for the USA. Continue reading “OIL WARS – The Coming New Disaster?”
THE OIL PRICE CRASH WAS INEVITABLE
Dec 23, 2014
Four years ago, we published in www.asmainfo.com, the Arab Stock Market Analysis website, a technical analysis forecast of crude oil prices which indicated the likelihood of oil prices dropping in 2014 towards US$ 33 per barrel ! Technical Analysis is a mathematical statistical tool to identify trends and possible future prices and as such sees what the naked eye, used to empirical evidence, does not see.
Even a non-expert in technical analysis can see from the attached graph that the oil price rise between 2003 and 2008 was very high and steep thus inviting a steep downward correction. Another steep rise occurred in the period between 2008 and 2014.
However, there is a sunny side to this storm. The same analysis indicated the possibility of oil prices rebounding up towards the US$ 200 – 250 range in a few years. But, such a rebound would be conditional on the World’s presently weak economies regaining their vitality, no alternative to oil is discovered and no devastating regional or world wars occur.
As for the direct causes of the recent crash of oil prices, a number of negative events came into play in close proximity of each other. The first was the rapid commercial development of Shale oil production and Fracking, which elevated the U.S. to become the world’s largest oil producer and dramatically shrinking its dependence on oil imports (It is now forecast to become a net exporter of oil in a couple of years). The second was the inability of the European economies to shake off their post 2008 recessions in addition to the slowdown in the Chinese, Indian and the Third World economies. Thirdly, the oil producers continued their pre-recessions production levels throughout this period. Continue reading “THE OIL PRICE CRASH WAS INEVITABLE”