So maybe OPEC does still matter. After deciding to keep its production levels unchanged at 30 million barrels a day and triggering Friday’s nearly 10 percent selloff, the cartel proved it can still cause huge swings in oil prices‐even if it’s in the opposite direction that most of its members wanted to see.

Iran, Iraq, Libya, and Venezuela were all hoping for a cut of at least 1 million barrels to keep prices from going lower. Citibank (C) analysts estimate that the world is producing about 700,000 barrels a day more than total demand requires. With international oil prices below $70 for the first time since 2010, most OPEC member countries will have trouble keeping their budget deficits in check. According to an estimate by Goldman Sachs (GS) last month, only Kuwait, the UAE, and Qatar are safe below $70.

OPEC’s idea is to try to knock out U.S. shale producers by driving prices lower than they can afford. That way Saudi Arabia, the cartel’s biggest exporter, can keep its market share in the U.S. But the damage to its fellow oil exporters could be severe. In Russia, for example, the ruble is plummeting. Iraq is already having trouble fighting ISIS, and lower oil prices won’t help. Libya is in chaos. Venezuela’s economy, already on life support, depends on oil for 95 percent of its export revenue. Iran’s oil minister on Friday told Bloomberg News that he has doubts the strategy will even work: “There’s no fact or figure to say that shale production will definitely decrease,” he said.

Story: At OPEC Meeting, Saudi Arabia Stares Down Texas and North Dakota

U.S. production probably will decrease, even if it takes a while. At $65 a barrel, it’s unlikely the U.S. can keep up its record-setting pace of expanding oil production. U.S. oil has jumped from about 5 million barrels a day in 2008 to more than 9 million. Even before OPEC’s decision, forecasters were calling for a slowdown. Last May, for instance, the Energy Information Agency forecast that total U.S. production would peak just shy of 10 million barrels per day before 2020.

By Matthew Philips December 01, 2014
http://www.businessweek.com/articles/2014-12-01/

There is no over production of oil. Let's bury that lie, this is a market share war. OPEC woke up to the game.

atlwireles:
There is no over production of oil. Let's bury that lie, this is a market share war. OPEC woke up to the game.

It is affecting America as it is affecting OPEC member countries

Since the end of August, the CEO and founder of oil-company Continental Resources has seen the value of his shares in the company fall from $20 billion in late August to just over $10 billion on Friday.

The American oil boom is the Dot com boom of 21st century. It is going to burst, OPEC read it right. It has already started, with many small companies heading for bankrupt protection.

atlwireles:
Since the end of August, the CEO and founder of oil-company Continental Resources has seen the value of his shares in the company fall from $20 billion in late August to just over $10 billion on Friday.

The American oil boom is the Dot com boom of 21st century. It is going to burst, OPEC read it right. It has already started, with many small companies heading for bankrupt protection.

Yea I agree, and it is going to affect the US economy. think about how much have been borrowed by these so shale oil frackers.

Isn't Saudi Arabia a US puppete? How am i supposed to believe that they suddenly woke up to challenge their masters?

ducii:


Yea I agree, and it is going to affect the US economy. think about how much have been borrowed by these so shale oil frackers.

Nobody can stay in business with oil below $75. The short traders are driving the market. 90% of all new American oil cost over $70 per barrel to produce. Many wells are highly leveraged and regional banks across America west/Mountain regions are having sleepless nights already.

This whole game will change when Banks begin to write off bad loans within the next 60 days. OPEC did a very in dept study and stuck when nobody thought they would.

pazienza:
Isn't Saudi Arabia a US puppete? How am i supposed to believe that they suddenly woke up to challenge their masters?

You think they are not privy to what the US is trying to do

At diz rate, shale oil will soon cripple and throw America back to square one.OPEC is getting it ryt dis tym

DON'T FOOL YOUR SELF THAT SHALE OIL WILL GO AWAY, AMERICANS ARE THE MOST INNOVATIVE PEOPLE ON EARTH.
The problem with Shale Oil and Gas is that it is drilling intensive. You need drilling almost every six months which is expensive. However Americans and Canadians are spending money on 'smart wells', well analytics and the complete digitisation of surface and subsurface production. American ingenuity will reduce the cost of production by $25 per barrel in th next three years I am sure. OPEC should be careful and a country like Nigeria governed by idiots should be even more careful. Oil price will NEVER EVER exceed $80 per barrel again. This are the dying embers. Nigerians need to hold their government accountable and force the oil money into productive sector that will start making a difference now. 2015 should be a year of strikes to make sure money flows into productive sectors. All the conspicuous consumption and private jet buying should be taxed painfully. Youths must have jobs, the young must be educated. American bashing will not help us, let us take our governments to the grinder.

ofiafuluego:
At diz rate, shale oil will soon cripple and throw America back to square one.OPEC is getting it ryt dis tym

It will not cripple the economy. Cheap petrol is good for US consumers. it will slow down the drilling of new wells and many small players will bow out. The oil business will once again be run by Exxon, Chevron, BP and Shells of this world.

ofiafuluego:
At diz rate, shale oil will soon cripple and throw America back to square one.OPEC is getting it ryt dis tym

I agree

atlwireles:


It will not cripple the economy. Cheap petrol is good for US consumers. it will slow down the drilling of new wells and many small players will bow out. The oil business will once again be run by Exxon, Chevron, BP and Shells of this world.

But you are forgetting Jobs Jobs Jobs that will be lost, and don't forget that the people preaching alternative sources of energy needs high oil price to make their ventures profitable, the Electric car manufactures will go burst because those Electric cars are Expensive to acquire.

atlwireles:


Nobody can stay in business with oil below $75. The short traders are driving the market. 90% of all new American oil cost over $70 per barrel to produce. Many wells are highly leveraged and regional banks across America west/Mountain regions are having sleepless nights already.

This whole game will change when Banks begin to write off bad loans within the next 60 days. OPEC did a very in dept study and stuck when nobody thought they would.

This is just a game OPEC is playing with the US to see who blinks first. I am just sorry 4 oil dependent countries that will be stuck in the middle but in as much as this will hurt shale oil production. I don't feel it will crack.

Adminisher:
DON'T FOOL YOUR SELF THAT SHALE OIL WILL GO AWAY, AMERICANS ARE THE MOST INNOVATIVE PEOPLE ON EARTH.
The problem with Shale Oil and Gas is that it is drilling intensive. You need drilling almost every six months which is expensive. However Americans and Canadians are spending money on 'smart wells', well analytics and the complete digitisation of surface and in face production. American ingenuity will reduce the cost of production by $25 per barrel in th next three years I am sure. OPEC should be careful and a country like Nigeria governed by idiots should be even more careful. Oil price will NEVER EVER exceed $80 per barrel again. This are the dying embers. Nigerians need to hold their government accountable and force the oil money multi start making a difference now. 2015 should be a year of strikes to make sure money flows into productive sectors. All the conspicuous consumption and private jet buying should be taxed painfully. Youths must have jobs, the young must be educated. American bashing will not help us, let us take our governments to the grinder.

Shale oil has always been here . The only reason it became a boom was the price of oil at $100 plus. If Nigeria is governed by ediots, what are governed called?

drnoel:


This is just a game OPEC is doing with the us to see who blinks first. I am just sorry 4 oil dependent countries that will be stuck in the middle but in as much as this will hurt shale oil production. I don't feel it will crack.

The independent producers are also a major problem. Countries like Brazil, Norway and Russia need to put a plan on the table, if they want OPEC to bail them out.

ducii:


You think they are not privy to what the US is trying to do

If actually this their ploy is a direct challenge to US,and not "the more you look,the less you see thing", then i am truly impressed by them arabs.


But,some people are saying the US and her NATO friends are using the crash in oil prices to punish, hurt and force Russia to checkmate her overgrowing political and military influence in Europe. Russian Economy has been in free fall with world crude prices, at this rate,it won't be long before Russians turn against Putin and co, forcing them to shelve their foreign agenda for now.

I am not that versed in foreign affairs,but what do you think about the possibility of Saudi and US, deliberately taking a hit, to chronically injure Russia?

drnoel:


This is just a game OPEC is doing with the us to see who blinks first. I am just sorry 4 oil dependent countries that will be stuck in the middle but in as much as this will hurt shale oil production. I don't feel it will crack.

It will, most of the companies are already beginning to cut staff, by the time oil gets to $50, which i believe it will get to, most of these companies will be forced to cut production.
Saudi Arabia will be hurt, but the have over $750 billion to fall on if the pinch bites harder

ducii:


But you are forgetting Jobs Jobs Jobs that will be lost, and don't forget that the people preaching alternative sources of energy needs high oil price to make their ventures profitable, the Electric car manufactures will go burst because those Electric cars are Expensive to acquire.

Apart from that ....all the short term problems caused by OPEC price wars in the US will be subsidized out by the American government. Even now I am sure they are already packaging loan guarantees, subsidies and other support measures to help their industry. US has '000s of smart energy economists and investment bankers and they can do anything. The cheap money to protect shale oil and gas could even be coming from the Saudis, Chinese and Russians for all you know. Let us not think Nigerian type stupidity is the norm in advanced countries. Some people actually love their motherland.

ducii:


It will, most of the companies are already beginning to cut staff, by the time oil gets to $50, which i believe it will get to, most of these companies will be forced to cut production.
Saudi Arabia will be hurt, but the have over $750 billion to fall on if the pinch bites harder

Then ask urself what nigeria has to fall back on.

I agree with adminisher. The Americans are innovative, push them to the wall and their scientists would in matter of time,find a way to produce shale oil, at a cheaper price.

They would soon or later,find a way, that's how their society is wired.

Nigeria needs to diversify her sources of foreign currency if she doesn't want to end up like Ghana.

Adminisher:


Apart from that ....all the short term problems caused by OPEC price wars in the US will be subsidized out by the American government. Even now I am sure they are already packaging loan guarantees, subsidies and other support measures to help their industry. US has '000s of smart energy economists and investment bankers and they can do anything. The cheap money to protect shale oil and gas could even be coming from the Saudis, Chinese and Russians for all you know. Let us not think Nigerian type stupidity is the norm in advanced countries. Some people actually love their motherland.

America don't just dole out money to corporations, the same America allowed Lehman Brothers to fail. If crude gets to $50, I see most of these oil companies in North Dakota and Texas going bust.

pazienza:
I agree with adminisher. The Americans are innovative, push them to the wall and their scientists would in matter of time,find a way to produce shale oil, at a cheaper price.

They would soon or later,find a way, that's how their society is wired.

They have been trying for decades, they didn't just find Shale oil, is just that when oil Prices got to $100 Shale oil became profitable.

atlwireles:


Shale oil has always been here . The only reason it became a boom was the price of oil at $100 plus. If Nigeria is governed by ediots, what are governed called?

Big Idiots.

Technology will soon ameliorate the margin squeeze at lower oil and gas prices. The lower prices will curb new investments in Shale gas a little but once you have invested capital in oil and gas and have started producing you are already a player. Canadian oil sands is also very high cost but they are also producing.
Let us not depend on Shale gas producers and unconventional oil going out of business at low price, it will not happen. Also Nigeria's unit cost of production has increased onshore to the highest in the world, it was becoming comparable to Shale gas that was why Shell has dumped all its onshore fields and sold them to local operators.
The problem is the low oil price will cause the world economy to expand but after it does the increase in oil consumption will never come up again because of Kyoto, hybrid cars, electric cars and investment in renewable energy. I nearly got a job last week in a UK company generating power for municipal use from waste and sewage, things are happening fast....so get your government thinking, stop them stealing or vote them out.

drnoel:


Then ask urself what nigeria has to fall back on.

Nigeria is not Saudi Arabia. We are a small member country in OPEC, if push come to shove , Nigeria can Leave OPEC, after all Brazil and Russia are not member countries.

To answer your question Nigeria has $38 billion

Where exactly is Shymex, i often enjoy his contributions in matters like this.

Adminisher:


Big Idiots.

Technology will soon ameliorate the margin squeeze at lower oil and gas prices. The lower prices will curb new investments in Shale gas a little but once you have invested capital in oil and gas and have started producing you are already a player. Canadian oil sands is also very high cost but they are also producing.
Let us not depend on Shale gas producers and unconventional oil going out of business at low price, it will not happen. Also Nigeria's unit cost of production has increased onshore to the highest in the world, it was becoming comparable to Shale gas that was why Shell has dumped all its onshore fields and sold them to local operators.
The problem is the low oil price will cause the world economy to expand but after it does the increase in oil consumption will never come up again because of Kyoto, hybrid cars, electric cars and investment in renewable energy. I nearly got a job last week in a UK company generating power for municipal use from waste and sewage, things are happening fast....so get your government thinking, stop them stealing or vote them out.

Crude oil is 20% of our GDP, make crude oil 20% of government spending. All our problems will disappear. In a country filled with parasites and lazy people you cry yearly and fight like junk yard dogs over oil prices. American oil is not your problem, but a Nation of lazy basratdddd.

atlwireles:


Crude oil is 20% of our GDP, make crude oil 20% of government spending. All our problems will disappear. In a country filled with parasites and lazy people you cry yearly and fight like junk yard dogs over oil prices. American oil is not your problem, but a Nation of lazy basratdddd.

I agree with you 100%, and take that bloody subsidy while you are at it

BlackTechnology:
Nigeria needs to diversify her sources of foreign currency if she doesn't want to end up like Ghana.

Nigeria is diversified already. Nigerians need to start funding government from other sources. In an economy of $520B, why is crude oil responsible for 80% of government spending.

ducii:


America don't just dole out money to corporations, the same America allowed Lehman Brothers to fail. If crude gets to $50, I see most of these oil companies in North Dakota and Texas going bust.

Have you seen the operations in North Dakota?. I drove past there one year ago. It is no frills high tech operations by independent producers. Very dynamic, entrepreneurial people, almost like Nigerians. A guy borrows money from the bank, drills using good data, and starts small scale production and is making only a margin of $20 a barrel but he is happy because he is a multi millionaire in three months already. There are now thousands of those entrepreneurs in the industry. Shale Oil and gas is mostly not for the oil majors yet although some are investing in it as well. The oil majors will lock in production and low oil price but the small scale independent oil producers I'll keep pumping. OPEC countries too have a price cut off, for Saudi Arabia I think it is $20 but they will pretend it is not so. For Nigeria anything below $40 is going to be very painful.

Adminisher:


Big Idiots.

Technology will soon ameliorate the margin squeeze at lower oil and gas prices. The lower prices will curb new investments in Shale gas a little but once you have invested capital in oil and gas and have started producing you are already a player. Canadian oil sands is also very high cost but they are also producing.
Let us not depend on Shale gas producers and unconventional oil going out of business at low price, it will not happen. Also Nigeria's unit cost of production has increased onshore to the highest in the world, it was becoming comparable to Shale gas that was why Shell has dumped all its onshore fields and sold them to local operators.
The problem is the low oil price will cause the world economy to expand but after it does the increase in oil consumption will never come up again because of Kyoto, hybrid cars, electric cars and investment in renewable energy. I nearly got a job last week in a UK company generating power for municipal use from waste and sewage, things are happening fast....so get your government thinking, stop them stealing or vote them out.

Those jobs will go, as long as oil is cheap those jobs will go, do you know how much it cost to develop those technologies, billions mate