[quote author=rhymz post=29756015]

Your analysis is full of scenarios that ignores many factors that have affected and continued to affect oil prices in the international market. The US alone has added 4 million new barrels of crude oil per day to the global market since 2008. (Global crude production is about 75 million barrels per day, so this is significant.)

Let me start with a clear warning!! I don't have time for peeps who are here for free classes and probably lack cognitive comprehension ability, the post you are mutilating was actually meant for someone else not you, for you to join the discourse if that is actually your mission, you need to have a minimum of an average IQ because once you sound like Terry G aka BrainX you will get no further response from me.



Back to the subject, on the post you mutilated, these were my exact words

"Saudi sees the US shale oil as big threat that will most likely push away their North American clients, to them they will like the price to drop to $50/bbl, which will make shale oil unattractive"

How can I make the above submission and you say I ignored the US boom? did you really read the post or do you have comprehension issues like the others before you?

Up until very recently, however, that US oil boom had surprisingly little effect on global prices. That's because, at the exact same time, geopolitical conflicts were flaring up in key oil regions. There was a civil war in Libya . Iraq was a mess. The USand EU slapped oil sanctions on Iran and reduced its oil exports. Those conflicts took more than 3
million barrels per day off the market.

please correct yourself, the civil war in Libya though raging for years just affected their production output recently(mid last year), the fact that Boko haram is tearing the NE part of Nigeria apart doesn't mean that economic activities have stopped in the south, that is exactly the scenario that was playing out in Libya before few months ago when the conflict mounted a bigger stage.

The US shale oil has always been a threat because every producer knows that conflicts don't last forever, here is an excerpt of forecast made
by Bloomberg as back as 2011, it peaked an ave of $83/bbl, far less than the supposed over $100/bbl obtainable bench mark.
note that the 2011 forecast was actually made in 2010

[url]http://www.bloomberg.com/news/2010-10-13/u-s-s-oil-price-forecast-increased-to-83-for-next-year-on-growth-outlook.html
[/url]

If the forecast for this present doom has been looming since 2010, How can you say "up until recently"? it has always been there and serious countries know that except for one governed by a dumb president.

Fast forward to mid-2014, the dynamics have changed;
1. Conflicts in many of these oil producing countries are beginning to ease out. For instance, In July, Libyan rebels opened two key export terminals, Es Spider and Ras Lanuf, that had been shut down for a year. Libyan exports rose unexpectedly. (They have since fallen again as conflicts have flared up, but that's been offset by rising production from Iraq, which is also getting its oil back online.)

What is your point here? Libya came online Oct 2014, went off Jan, 2015, at a time they were expecting to ramp up production to 1.2mbbls/d, it is no news, everybody is aware.

2. companies in the United States using techniques like fraking and horizontal drilling to extract oil from shale formations in North Dakota and Texas. And even In Canada where energy companies are heating Alberta's gooey oil sands with steam to extract usable crude. All these pointing to the fact the biggest consumers have become the biggest producers and have no need to buy more oil or at least drastically reduce demand, oil prices expectedly came crashing.

;DThat is exactly the US shale oil threat everybody is talking about, the shale oil is extracted using a process called "Fracking" not really "Fraking" like you put it, it is a hot blend of sand, water and chemicals at high pressure.
Horizontal drilling is actually called "Directional drilling" here, we use it in Nigeria, contractors like Schlumberger will tell you more, you sound like you are typing off a textbook.

About your demand drop claims, you are right, but how significant is it in the scheme of events? ie where you should hinge your argument.
If you think that Demand has fallen drastically, you should be able to tell us countries who dropped their quota and by what margin?
Just like we have been able to clearly identify Libya off and on supply, US shale boom and the Saudi, production rump.

3. Unfortunately, even the almighty OPEC's influence has greatly been reduced by market share politics giving these developments. Looking at the jostle for oil market share going on between OPEC's member state, there is very little Nigeria can do as countries like Saudi Arabia, Iran, Iraq, Kuwait and their likes have advantages that countries like Nigeria, Venezuela and even non-member State like Russia do not have:

Now this is the crux of the discussion, it bites my marrow when you say there is nothing we or any other OPEC nations can do. you seem not to understand that the Chairman of OPEC is a Libyan whose country is in turmoil, hence, he is a huge Liability for the other members, the reason Iran, Nigeria or Venezuela (being the hardest hit in this crisis) should have done something about that.
Venezuela and Iran, understandable due to foreign sanctions but Nigeria's lack of a comprehensive foreign policy, is inexcusable.


Refer to this thread I made in Oct 2014; https://www.nairaland.com/1953877/these-6-countries-screwed-oil


There in, I was able to highlight countries that will be hardest hit, are they not the victims today?
what you need to learn from that is that, there is nothing happening in the industry today that is an accident, it is sardonic to say the least that Nigerians could not see the glaring betrayal and incompetence of Mr president on this issue,
(just like Ebola whose WHO alert was posted in August 2012, Mr president and Onyebuchi chukwu went golfing with the budgeted over 450m for two consecutive years for control of infectious diseases, till Patrick Sawyer took 6 Nigerian lives and psychologically damaged many, Nigeria hadn't a single infra red thermometer in our biggest international airport. Today, Nigerians are happy for him that he controlled Ebola when it is obvious, it wasn't supposed be here in the first place)


I am for the production cut, and like Buhari has hinted, other world leaders are going for it.

Saudi oil Minister visited Venezuela (9th in the world) and Mexico (10th in the world) recently, you think it is a coincidence?
Venezuela president Maduro just left Saudi few days ago, another coincidence too?
Maduro is visiting UAE (8th in the world) and Algeria (15th in the world) before month end, coincidence too?

This is a quote from the Venezuelan Govt after the meet with Riyal;

"The Venezuelan government said in a statement that “we agreed to work to recover the market and oil prices with state policies between the two energy powerhouses.” It provided no details."

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/venezuelas-maduro-seeks-support-from-saudi-arabia-on-oil-prices/article22405292/


The Venezuelan President just echoed what Buhari said, that something can be done, is Maduro stvpid too? Because Jonathan got a PhD with Expo and tells you, nothing can be done, you believe him and condemn people who can at least try to do something?

I even went further in my penultimate submission to state that this is the right time for the OPEC leadership to woo putin, considering his pariah status in the EU.

If the Producing giants are lobbying to get it right, what has Nigeria done since the inception of the crisis? who is Nigeria lobbying? who is Nigeria holding talks with? when we get to the next round of this disaster being import cuts and food shortages, you will say, "hey! don't blame the president" yet he is sitting dumb like an Oracle in Aso rock doing nothing.

a. Small population to continue oil funded social programs, welfare packages and subsidies in their countries and keep citizens from protesting.

I know, this is Putin's strategy, what has it got to do with the discussion?

b. Huge exchange reserve to cushion the effects of low prices to sustain the "price war" for a long period of time as they wait for the cost of the technologies fuelling "tight oil" boom to rise to an unattractive level; might never happen or at least not any time soon.

Who stopped Nigeria from piling up huge savings when the price was good? OBJ an old illiterate farmer from the 2000-2003 boom, saved up so much that he paid up all our foreign debts to the tune of $12b, he launched the NIPP to the tune of $16b, (a foundation every administration is building on today, as a matter of fact, NIPP is the only hope Nigeria has to get electricity right) and still have $68b, in Forex cash for a day like today, Your PhDumb Jonathan, has zero national project, he could not save a kobo? he could not pay off any debt? he feasted on the reserves like a vulture and you expect a sane man like me to clap for him? oh! please.

c. Massive foreign-exchange reserves to finance budget deficits and continue to sustain government plans in these countries. All these luxuries we don't have, fact.

Who told you it is a luxury? why does tiny Norway with superb infrastructure, oil production of paltry 1.9mbbls have foreign reserve in form of a Sovereign wealth fund to the tune of over $700b, with a tiny population of 5m people?
And you think it is a luxury for a Jonathan with over 2.5mbbls of cluelessness, don't provoke me abeg!

The idea of rallying member state to reduce oil production will only see us cede more market shares to the likes of Saudi Arabia, Iran, Kuwait, Russia and their likes who should have taken the front seat of making such moves but are reluctant because they fear they will lose their share of the already dwindling oil market. Saudi Arabia for instance, argued that even if they cut down production, prices will still fall, and they will lose market share, they pointed out how it did not help them in the 80s when a similar situation happened.

Stop saying what you read from text books, one country cannot just wake up and cut production, as a matter of fact, all OPEC nations cannot do it, because this challenge though not new, needs to be handled with some tact and finesse.
If you pay attention, you will notice that nations pushing for the cut are not only OPEC members, they are trying to lobby both OPEC and non OPEC members.
The issue now is that formerly, OPEC who is in control of nearly 40% of the world output used to negotiate as a block, but the directionless of the present leadership has made the lobbying very difficult and that is where Nigeria, Venezuela or Iran would make a difference.
Even if Saudi wants to do a price war with the US and feel like an OPEC lord, Russia in OPEC will make OPEC not miss Saudi rather will consolidate their influence with over 1mbbls. For now, it is not necessary because most member States were all prepared except Nigeria.
Big Shame on Jonathan!!

Nigeria can not afford to put itself in the position you are proposing because our national budget is still heavily reliant on that 2.8 million barrels per day you are trying to experiment with in the comfort of your arm chair critiquing. Even Russia that has about 50% of its budget being funded by oil revenue can not afford such an idealistic "price war" now with the US shale oil proponents, that's the truth. The issue here goes beyond oversimplifying dynamics and throwing blames around like you really believe a Buhari government has some superior bargaining antics to force the hands of other member states who also have to face economic backlash and prevailing economic realities in their climes.

Again, the proposal of feeding and giving stipends at this trying times is the most brainless idea ever to be suggested by anyone who is watching what is going on with even strong economies in Europe. APC is playing to the gallery and not coming up with any workable solution, that is the truth, it does not matter how you try to grandstand for them.

Where did you get 2.8mbbls from? are you a thief?

raumdeuter:
[size=14pt]Laudable programs.

This shows a responsible govt

In sane countries there is a welfare package for the poor in the society

Thank you Buhari for proving once again you are the leader we need unlike that animal in fedora hat currently in ArseHole rock[/size]

Zombie oh Zombieeeeeeeee
Wetin happen last naa?

cc: Anonimi, Rozayx5, Mogidi, Drss, Ecoterrors, Sunnyb0b0, Maclatunji, Iroh88, Emekamex, BuddahMonk, MizMyColi, Ola6, Chukwudi44, NgeneUkwenu, Midolian, Modath, OrlandoOwoh, Jarus, Owobokiri, Owobikiri, AnambraDota...

Laugh don kee me!

Kenai:


Zombie oh Zombieeeeeeeee
Wetin happen last naa?

cc: Anonimi, Rozayx5, Mogidi, Drss, Ecoterrors, Sunnyb0b0, Maclatunji, Iroh88, Emekamex, BuddahMonk, MizMyColi, Ola6, Chukwudi44, NgeneUkwenu, Midolian, Modath, OrlandoOwoh, Jarus, Owobokiri, Owobikiri, AnambraDota...

Laugh don kee me!

Na laff I dey laff those zombies

How can any sane person refer to Buhari as a man of integrity?
Surely whoever associates him with integrity needs to have his brain examined.



[img]https://www.nairaland.com/avatars/rfpz2aiih02arcv4l0q6myapvub3qyub1364484[/img]



www.nairaland.com/attachments/3340066_image_jpeg9f360c5ab7736510df54c882e9dbf188



www.nairaland.com/attachments/3124978_2015072422_34_22_png89c9c4393b0c172f46d537a816e14f2e

Kenai:


Zombie oh Zombieeeeeeeee
Wetin happen last naa?

cc: Anonimi, Rozayx5, Mogidi, Drss, Ecoterrors, Sunnyb0b0, Maclatunji, Iroh88, Emekamex, BuddahMonk, MizMyColi, Ola6, Chukwudi44, NgeneUkwenu, Midolian, Modath, OrlandoOwoh, Jarus, Owobokiri, Owobikiri, AnambraDota...

Laugh don kee me!

hahahahahahahhaha zombies will always be zombies.

anonimi:
How can any sane person refer to Buhari as a man of integrity?
Surely whoever associates him with integrity needs to have his brain examined.



[img]https://www.nairaland.com/avatars/rfpz2aiih02arcv4l0q6myapvub3qyub1364484[/img]



www.nairaland.com/attachments/3340066_image_jpeg9f360c5ab7736510df54c882e9dbf188



www.nairaland.com/attachments/3124978_2015072422_34_22_png89c9c4393b0c172f46d537a816e14f2e

i wonder o. xombies ar unbelievable

raumdeuter:
[size=14pt]Laudable programs.

This shows a responsible govt

In sane countries there is a welfare package for the poor in the society

Thank you Buhari for proving once again you are the leader we need unlike that animal in fedora hat currently in ArseHole rock[/size]

I bet you are still eating your words or are you done?

Kenai:


Zombie oh Zombieeeeeeeee
Wetin happen last naa?

cc: Anonimi, Rozayx5, Mogidi, Drss, Ecoterrors, Sunnyb0b0, Maclatunji, Iroh88, Emekamex, BuddahMonk, MizMyColi, Ola6, Chukwudi44, NgeneUkwenu, Midolian, Modath, OrlandoOwoh, Jarus, Owobokiri, Owobikiri, AnambraDota...

Laugh don kee me!

Me na die I dey so, Buhari don kee pesin.

While GEJ and PDP are concerned with stealing from the poor people, Muhammadu Buhari is concerned with providing welfare packages for the masses

raumdeuter:
[size=14pt]Laudable programs.

This shows a responsible govt

In sane countries there is a welfare package for the poor in the society

Thank you Buhari for proving once again you are the leader we need unlike that animal in fedora hat currently in ArseHole rock[/size]

1 year and 6 months later

Anticorruption:


1 year and 6 months later

Thank you Boo-hari as you have done all these and more!! Bubu till 2100

ALL does promises will be forgotten once the dark side of power enters his mind.
but all the same i prefer him to an itueke outcast.
GMB FOR PRESIDENT COME FEBUARY

This one saw the light but he was sentimental.

lekkie073:
Joker.....
The moment he said he would stabilise the price of crude oil, I knew this man is nothing but a nonentity

God bless you Nostradamus

raumdeuter:
[size=14pt]Laudable programs.

This shows a responsible govt

In sane countries there is a welfare package for the poor in the society

Thank you Buhari for proving once again you are the leader we need unlike that animal in fedora hat currently in ArseHole rock[/size]

eph123 oya come and have a cool laugh

kingDavidda1st:
Empty promises, unrealistic plans. When he gets there(if at all) stories will be told as to why this agenda is unachievable maybe due to a bad previous government.

Please you deserve a cupcake because this was what is happening today

atlwireles:
What should we expect from a primary six dropout.

I miss this guy and Sincere9gerian

While GEJ and PDP are concerned with stealing from the poor people, Muhammadu Buhari is concerned with providing welfare packages for the masses

Tonyebarcanista made this statement with his barcanista moniker

lalasticlala:



Fixed

Fixed what my brother? Hope you are seeing the Change

donmalcolm21:
eph123 oya come and have a cool laugh

hahahaha by now, they are already seeing the reality