There are striking parallels between OPEC’s current situation and 1990s. During 1997-1999, OPEC lost the market control and the oil price slipped to below 10 USD/ barrel.

Whilst investors may wonder whether the markets will follow the same trajectory this time, it is important to remember that it was OPEC (Organization of Petroleum Exporting Countries) that emerged from that crisis to see the oil prices rebound to just about 150 USD/ barrel. If the history is repeating itself, OPEC would regain its control over oil prices.

Big OPEC members uplift production

In 1992, Venezuela had a growth surge that pushed its output from 2.2 million barrels/ day to 3.5 million barrels/ day. Saudi Arabia responded by raising its own production, the market becoming oversupplied. This time around, Saudi Arabia has hit record on output when pumping 10.6 million barrels/ day early this year, while Iran is planning to boost daily output by up to 1 million barrels next year after the sanctions are lifted.

Asia’s economic slowdown

In 1997, when OPEC lifted their production, Asia headed into the economic meltdown.The devaluation of the baht – the currency of Thailand in July that year, sparked a financial crisis that pushed Malaysia, Indonesia, Philippines, Singapore and Thailand into the recession. According to data from the International Monetary Fund (IMF), the group’s GDP decreased 8.3% in 1998 as compared to the average growth of 7.5% in the previous decade. This time around, Asia is not collapsing though, China is experiencing slowest expansion in 25 years.

‘Ghost of Jakarta’

Back in 1997, at a meeting in the Indonesian capital, OPEC decided to raise production quotas just right in the time the Asian economic crisis began, making oil prices drop to as low as $10. Veteran oil ministers still refer to the ‘ghost of Jakarta’ haunting OPEC’s decisions. Indonesia has now come back to the center of OPEC after this nation rejoined the group last week after suspending its membership in 2009.

El Nino

During 1997-1999, the oil slump is associated with El Nino that curbed demand for heating fuel. The ocean surface in the equatorial Pacific became warm, making fall and winter in the Northern hemisphere became milder than normal.

Back to 2015, El Nino has been becoming an issue of significant concern. The U.S and northern Europe’s heating oil stockpiles are high, potentially impacting the overall crude demand.


Naimi vs Zanganeh

Just as they were around 2 decades ago, al-Naimi - the Saudi Arabian Minister of Petroleum and Mineral, and Bijan Namdar Zanganeh - Iranian Oil Minister, stand in opposition across the Vienna’s conference table. Both have a long history of working together in resolving oil gluts, but this time the differences loom larger. Saudia Arabia and Iran are standing in the conflicting position in Syria, Yemen and Iraq, which gets in the way of the oil business.

Political change in Venezuela

In 12/ 2008, Venezuela witnessed an abrupt political change when Hugo Chavez won presidential elections, opening a new era of socialism and creating the turning point for the oil and gas market. He joined Saudi Arabia in cutting the production, putting an end to a decade of increases, even though his policies slowly drove out of a number of the country’s foreign oil investors. After 16 years, the country’s crude production has fallen by 10%.

Early last week, the world has witnessed the change in political power in Venezuela when the opposition has won its first elections, taking a majority in Congress

Source: oil and gas news

UN Climate Change Congress just projected to cut the use of fossil fuel by half before 2025 and it is expected to stop the use by 2050.

The world is moving on to a world without Oil and you think we are going back to 1990 when giangatic computers can't do the work of a notebook or tablet.

It's high time we invest in our agricultural sector. God help, upon graduation, I'll set up a poultry farm, before I even submit my CV in any organisation.

Solar's the next big thing.

Oil and Gas Outlook: 2016 Will Be about the Same as 2015?

This may be the biggest question when 2015 is being wrapped up and 2016 is just around the corner: What will be the state of oil and gas industry in 2016? Rather, how about oil prices, and supply and demand outlook in the upcoming year? Here are few answers!

Trying to predict the trends of oil prices is difficult and the results are just, more often than not, disappointing, especially when we turn a blind eye to the facts and figures and rely on hope and indulge in wishful thinking. A year ago after OPEC’s decision not to cut oil output and keep the oil market over-supplied, a number of oil industry analysts, professionals and CEOs were expecting the recovery of oil prices in a short time. That’s why the oil and gas industry’s reaction to the current downturn in oil prices was not as fast as it should have been, and the aftermath in many cases were just catastrophic.

The oil and gas industry in 2016 will continue to experience the negative impacts of the current low oil prices but with reduced intensity because it adapts to the low-oil-price environment. It will continue to consolidate, and many mergers and accusations will take place. The world’s exploration and production (E&P) activities will witness a slowdown because E&P expenditure that has, thus far, declined by 20%, will also fall by 11% in 2016, as per Evercore ISI's 'Global 2016 E&P Spending Outlook: An Industry Mired in Recession’.

Levels of crude oil global stockpile will keep increasing and a phase out of fossil fuel subsidies in numerous parts of the world will continue to emerge as well when many countries leverage the current low oil prices. Demand will increase slowly though, that will be counterbalanced by overabundant oil supply and huge stockpile. And lastly, the oil prices will remain in the levels between $35 to $60/ barrel unless there occurs a sudden geopolitical event, or an agreement on oil production cuts is reached between OPEC and non-OPEC.

More predict about oil and gas industry: Oil and Gas manpower

Nigerians don't learn.

How long will oil remain relevant.?

Stop deceiving Buhari.

The petrol dollar needs crude prices to soar and now that US shale oil will soon dominate the global energy market, get ready to see crude prices soar again.

The situation in the ME is about to go full retardo as the US begins to pullout from the Arabian gulf in order to end the 10million bpd Saudi output.

The US will abandon Saudi Arabia to Iran in order to take out the excess cheap crude from the market in order to be able to make shale oil production profitable .


And since our Khalifar has already chosen to side with the Saudis , war will come to the north and from there Nigeria will be no more.

EternalTruths:
Nigerians don't learn.

How long will oil remain relevant.?

Stop deceiving Buhari.

Oil will forever remain relevant.

Its price value fluctuates depending on who controls majority output.


US lifts oil export ban and almost immediately war looms between the Saudis and Iran.

Just wait and see crude soar to $100 before the end of 2016.

It's just a pity that northern Nigeria has decided to join the war.

****

APCzombie:


Oil will forever remain relevant.

Its price value fluctuates depending on who controls majority output.


US lifts oil export ban and almost immediately war looms between the Saudis and Iran.

Just wait and see crude soar to $100 before the end of 2016.

It's just a pity that northern Nigeria has decided to join the war.

Niger Delta and Biafra will rise out of the ashes of Nigeria

Don't deceive yourself.

The earlier Nigeria allow the various states feed themselves through control of their resources the better

Mark my words

EternalTruths:


Don't deceive yourself.

The earlier Nigeria allow the various states feed themselves through control of their resources the better

Mark my words

Oil will drop to $20 before the year ends.

Oil will rise because US shale needs crude to be expensive and the only way to make crude expensive is to cut off the Saudis and the US has started doing that by urging the Saudis to take on Iran.


Northern Nigeria will send their sons to fight for Saudi and also to open another front in their own region to fight shiites.

****

[quote author=APCzombie post=41704569]

Oil will rise because US shale needs crude to be expensive and the only way to make crude expensive is to cut off the Saudis and the US has started doing that by urging the Saudis to take on Iran.


Northern Nigeria will send their sons to fight for Saudi and also to open another front in their own region to fight shiites.

****quote]

Iran and Saudi will not fight directly.

They will try to undo each other economically leading to excess supply of oil in the market which in turn will cause price to fall

As for shale oil, US is more interested in cheap oil that is why they took the part of Shale oil. Though the cost to obtain it is high but it caused the OPEC nations to reduce price in order to control market share. Unknown to them, they helped the US achieved her goal

What is US goal.? Cheap oil.

In the end, it will force Nigeria to find other means to survive or she perish.

If the new source of wealth springs up North, you and I know the North will question the unity of Nigeria.

By then the dream of SE and SS will receive less resistance.

EternalTruths:


Iran and Saudi will not fight directly.

They will try to undo each other economically leading to excess supply of oil in the market which in turn will cause price to fall

As for shale oil, US is more interested in cheap oil that is why they took the part of Shale oil. Though the cost to obtain it is high but it caused the OPEC nations to reduce price in order to control market share. Unknown to them, they helped the US achieved her goal

What is US goal.? Cheap oil.

In the end, it will force Nigeria to find other means to survive or she perish.

If the new source of wealth springs up North, you and I know the North will question the unity of Nigeria.

By then the dream of SE and SS will receive less resistance.

Shale needs conventional Crude prices to be high in order to be profitable.

The Saudis are thinking of creating a pan Arabic Sunni state and Iran is the only obstacle.

Their Sunni militias in Syria are not doing the job fast enough because of Iran's meddling so now the inbred retardos want to take on Iran directly because the buffer zone (Iraq) between these two nations has since gone to Iran after Sadam's ouster by the US.


Make no mistake, Washington and WallStreet need this war because it will be a win win for them as they will eventually take out 15million bpd output from the market and make crude expensive to slow down china .


The US will also rake in billions from arms sales and the conflict will be prolonged by arming both sides.

The Saudi royals will also not mind the war because they will use it as an excuse to relocate and retire in peace in the west in anticipation of a long overdue populist revolt on their reign.

This war will happen because the petrodollar needs it to happen.

APCzombie:


Shale needs conventional Crude prices to be high in order to be profitable.

The Saudis are thinking of creating a pan Arabic Sunni state and Iran is the only obstacle.

Their Sunni militias in Syria are not doing the job fast enough because of Iran's meddling so now the inbred retardos want to take on Iran directly because the buffer zone (Iraq) between these two nations has since gone to Iran after Sadam's ouster by the US.


Make no mistake, Washington and WallStreet need this war because it will be a win win for them as they will eventually take out 15million bpd output from the market and make crude expensive to slow down china .


The US will also rake in billions from arms sales and the conflict will be prolonged by arming both sides.

The Saudi royals will also not mind the war because they will use it as an excuse to relocate and retire in peace in the west in anticipation of a long overdue populist revolt on their reign.

This war will happen because the petrodollar needs it to happen.

Slowing down China's economy through high cost of oil is not part of US plan

Reason

1) it will be counterproductive to US industries

2) Chinese people will accept lower wages to counter the US. Something the US citizens can't do for their economy


In short , cheaper oil reduces production cost for US industries which will reduce industrial migration to China where cost of production is low.


So your view about the Chinese angle is not realistic