989900B:


There is no other 'rare' commodity that is consumed by billions in billions of litres/day!

Saudi and Iran pumping at full throttle, with cheap ISIS oil, and shale oil, and new oil producing states = 'oil glut'.

Demand and supply determines price. If you over supply, you get to sell your goods for cheaper, now would you rather sell a finite number of goods @ a cheaper price or maximize profit, especially if your everything 90% depends on that commodity?

Most oil producing countries need oil to be above $60 to break even.

So if oil is selling below $30/barrel, that is some 'mayday'!

OTOH, you can't diversify without oil to power industrialization and development.

Likewise you can diversify without 'ego' 'kudi' 'owo' = oil in our case.

omonnakoda:
I am really struggling to understand what your point is exactly,honestly.
My point is a simple one the question of expecting any player in the market to be "reasonable" is naive.The players are COMPETITORS and are jostling for market share ultimately the market will find an equilibrium that does not depend on "reasonableness"
[s]Now your claim that oil is consumed in billions and billions of dollars is irrelevant but not only that it is EXAGGERATED[/s]. How many commodities are liquids i just do not get it/ We consume a lot of cement Iron ore and millions of tonnes of other commodities.SO WHAT?
Suggesting SAUDI should be reasonable is simply suggesting they should give up market share to their competitors which makes no rational sense

Even if it were true I do not see the relevance to whatever obscure point you might be makin

989900B:


No doubt!

BTW, I don't think Turkey should be complaining about refugee influx, since they're indirectly funding ISIS by buying majority of their oil . . . some other countries and large corporations are buying from them buy proxy too.

See:

http://ig.ft.com/sites/2015/isis-oil/

http://www.newyorker.com/news/news-desk/the-isis-oil-trade-from-the-ground-up

http://www.ibtimes.co.uk/russia-spots-12000-oil-smuggling-trucks-turkey-iraq-border-1534917

989900B:


Summary:
1.Higher prices are in all oil producing countries interest.

2. You can't have higher prices with 'glut'.

omonnakoda:

[s]I find these statements naive and unrealistic. There is a real world and what drives price is supply and demand.
Not all oil producing countries are exporters or require oil revenues to run their government or extract equal amounts of rent from the commodity. All oil producing countries do not have the same interests and not all interests are economic. With respect your assertions are meaningless in a real world scenario because oil producers are competitors and would take measure to drive out competitors or discourage production. The term "HIGHER PRICES" has no meaning or definition. Perhaps a more sensible term is OPTIMAL and for some that would not necessarily be the highest price but a price that keeps their competitors out of business [/s]

989900B:


I am sorry I have to trash all that.

1. You are only listening to yourself.

2. No oil producing country is immune to fall in oil prices (From the US, to Canada, to Saudi, to Nigeria, to Russia, to Venezuela . . . in 'varying degrees') . . . probably only the US among the top producers does not practically depend on oil money for almost half of its expenditure, almost every other 'top' oil producing country does, from Angola, to Nigeria, to Saudi to Russia to Brazil.

3. 'Higher prices' definitely means 'optimal and above' . . . are we really doing semantics now? (BTW, cost of production/barrel varies and averages at about $40-$50/barrel across board . . . cheaper for some countries, and can be as high as $80/barrel for the US for example . . . which is a point OPEC would be weary to cross.)

4. Since you know better than the whole of the OPEC community and Russia, who are calling for 'reasonableness' between Saudi and Iran as it affects oil prices, maybe we should just listen to you.

omonnakoda:
I live in the real world where there has never been an outbreak of such Naive reasonableness. I have observed oil prices for more than 30 years and from 1984 till 2000 at least they remained consistently low except for a spike in 1991. Reasonablesss has never been a factor in the oil markets and never will be so let us come back down to earth. Saudi Arabia has about the lowest price of production and their current behaviour might prove painful in the short term but it is completely rational.The market will sort itself out it always has and always will

omonnakoda:
I live in the real world where there has never been an outbreak of such Naive reasonableness. I have observed oil prices for more than 30 years and from 1984 till 2000 at least they remained consistently low except for a spike in 1991. Reasonablesss has never been a factor in the oil markets and never will be so let us come back down to earth. Saudi Arabia has about the lowest price of production and their current behaviour might prove painful in the short term but it is completely rational.The market will sort itself out it always has and always will

989900B:


Oil will always ebb and flow like I noted in the 'original post', but people, countries, corporations play their hands.

1986 dollar and wages, are not the same as 2016 dollar and wages.

Saudi's and Iran's (especially the majnoon fields) production cost the lowest, but Saudi is already planning to sell some assets including planning to sell part of almighty ARAMCO, Saudi and Qatar are planning borrowing already.

omonnakoda:
Wages is not really a relevant variable. At any rate there is more variation in wages among countries that produce oil than in one country comparing 1986 -2016. You keep introducing all kinds of irrelevancies to what is a simple issue. Oil is a commodity and its price will depend on demand and supply. Asking a major supplier to cut production so everyone can enjoy "higher" prices is unrealistic and unsustainable. Countries will COMPETE and not Collaborate for market share and the weaker producers will edge out.
The world lived with low prices for much of the 80s and 90s so there is nothing new there. Not all oil producers are countries .Many are just companies and they will produce if there is profit to be made and the moment oil prices rise they will reenter the market. From that perspective the Saudi strategy is the right one

ApexTitan:


That 998 guy appears to be stuck in a fantasy land where appeals to 'reasonableness ' in a competitive market is a thing. Let him be, his naivety which is on display here is of no consequence, thankfully he doesn't work or set policy for those who have to engage in this market in real life.

989900B:


If countries won't collaborate, why is there OPEC?

Read the latter part of my last post again, that answers the rest part of your opinion.

omonnakoda:
What percentage of world oil output is situated in OPEC= 40%

Even within OPEC do countries have the same objectives needs or priorities? The reality is OPEC is and has been a toothless bulldog for a long time. At any rate Saudi is the largest producer in OPEC and they havee very different agenda from Iran ,from Venezuela or Nigeria. Nigeria would like to produce all it can and still enjoy higher prices expecting that to come from reduced Saudi production.Is that not funny? The reality is they are competitors.

989900B:


You know you talk a lot about 'in the real world', in the 'real world', you can both be competitors and collaborators, yes or no?

omonnakoda:
Where are we going with this? It does not seem to me like there is any purpose to this really......

lawson007:
This is what is really happening to the oil market.
@point 1= the oil price started dropping from the highs of $105 per barrel in 2014
@point 2= It bottomed out at about $23/$25 per barrel in February 2016
@point 3= this is the point where we are and the future outlook is as follows:
if price does not successfully close above $48-$49/barrel convincingly then expect price to fall again to about $38/$40 or even lower per barrel.
The next scenario is that if price should cross over $48-$49 per barrel within the next 2 weeks then we are in for a ride to $70/barrel.This could happen before the end of 2016.From this point onwards I see only upward movement towards $100 per barrel 2017-2018.
that is my analysis and professional insight.So let those that have serious investments in this sector watchout for these levels and know when to hold,invest or sell off.I wish you all the best.

Isoni:
Enemies of the State right now...

modath:
989900B, oya join Mo..

I see 50$ in the not so distant future...

omonnakoda:
There is no analysis present here just opinion no different from pools or Baba Ijebu number forecasting. To talk of "analysis" one would expect even the most basic modelling that countenances current demand and supply. Without those two key pieces of information one is just speculating.

lawson007:


Well,i must say there is forecast and hindsight view point.hindsight always sees clearly when the did is done while forecast is branded different names.i am with side of forecast because the early bird gets the worm.imagine someone spotted the trend reversal from the technical point of view in April 2014 and acted according before those elements of demand and supply kicked in.Such an investor or government would be better off by now.Now these charts are a product of Macro and micro economic datas over the years that forms cyclical movements.These circles always repeats itself.Like Warrent Buffet would says"It is all in the charts".Big time investors don't wait for demand and supply factors to play in because they are already ahead by their way of forecast.when those w5th the demand and supply analysis come into the show they are ready cashing out their profit. FYI when i posted the first post or "Baba Ijebu" or "Pool" as you would prefer to call it,oil price was back to $43 and i pointed out that it is heading to $48-49 per barrel,today it is cruising above $46.48.i repeat there could be a halt @$48-49 per barrel for minor retracement-this is a comfortable place for your demand and supply factors to come into play.After that price action will resume bullish trend and take oil price toward $60-77 hopefully before december 2016.this is my forecast and analysis,all wise investors show know when to hold or take profit.cheers

omonnakoda:
Mr Big time investor why don't you go and invest since you are so good at predicting the future.Do not give away your knowledge for nothing
I would be very glad if you could provide a citation for where Warren Buffet said

"it's all in the charts"

7lives:


The guy understand how it works gba fun eni to ju e lo, the guy couldn't have said it better.
The bulls have seize that market.

omonnakoda:
what is the meaning of this cartoon?
There is one theatre where people prove their knowledge it is not Nairaland
It is the market so you can take tips from him and put your money there.Talk is cheap. Real people invest real money

7lives:
;

D I know you are not happy the price is going up, stop it if you can.

omonnakoda:
Clearly you are not literate so just get out of my face. Go and play with your coevals

7lives:


ENEMY OF PROGRESS, E PAIN AM, SHIOR.