Eastern Railroad Discussion > OPEC cuts production

OPEC has decided to cut 1.2 million barrels per day, and non-OPEC countries have agreed to cut an additional 600K.

http://www.usatoday.com/story/money/business/2016/11/30/oil-production-opec-meeting-vienna-saudi-arabia-iran/94652618/

Anyone have an idea how quickly we could see an increase in oil trains again?

Posted from Android

dan7366 Wrote:
-------------------------------------------------------
> OPEC has decided to cut 1.2 million barrels per
> day, and non-OPEC countries have agreed to cut an
> additional 600K.
>
> http://www.usatoday.com/story/money/business/2016/
> 11/30/oil-production-opec-meeting-vienna-saudi-ara
> bia-iran/94652618/
>
> Anyone have an idea how quickly we could see an
> increase in oil trains again?
>

That will depend on if the price of crude rises high enough to justify new production in the Bakken Shale, which in turn will depend on whether OPEC and others agreeing to the plan actually adhere to their production quotas, or if other producers have lower-cost capacity they can ramp up to fill the void.

From the linked article: “This is a much bigger cut than most people thought we’d get and could send the oil price up to between $56 to $60 per barrel," said Bob Minter, investment strategist at Aberdeen Asset Management, in a note. Based on this statement, I don't see a lot of support for reviving Bakken drilling, which if I recall correctly starts becoming profitable only at a higher crude price -- perhaps $80/barrel? Remember that world crude prices were well over $100/barrel during the Bakken Shale boom.

Of course, that would also mean paying more at the pump. I know which matters more to me.



Edited 1 time(s). Last edit at 12/01/16 08:11 by toledopatch.

and gas jump 10 cent a gallon here in Northwest Fla.
thanks to that...............
Just in time for Christmas.......................

JLSeale

Forty cent difference in gas price from high to low. Here in Northwest Ohio.

Posted from iPhone

Expect to see US well production increase at any level over $50/bbl. Historically these "big" OPEC agreements have been accompanied by rampant cheating by smaller producers and you should see the same thing within weeks. Saudi Arabia is not the be-all/ end-all of oil it used to be. They are fighting for their economic lives and some analysts question whether Saudi Arabia has any clout at all. What was once a very disciplined market HQed in the mid-east is now a global free-for-all.

Like Venezuela is really going to cut.

Out



Edited 1 time(s). Last edit at 12/03/16 11:59 by callum_out.

We saw a 50 cent increase in the last week in SW Ohio

Posted from Android

I suspect you will see Permian basin production increase before Bakken sees much increase.  Permian oil is transported mostly by pipe, but it will help fracing sand and other supplies moving in.  You may see some action in Bakken though.  Of course, an increase oil production in these basins will mean more natural gas output, so down go natural gas prices and thus coal demand will go down.

My financial planner and I talked about thianeaier this year ... he said OPEC was playin a dangerous game lowering oil prices to level rhey did to try to cut Bakken oil production ...

he told me they couldn't afford to keep oil at the levels they were at and some oil producing countries were on the verge of bankruptcy Saudi Arabia being one of them ...

they wanted to squash the American oil producers to the point of putting them all outta business but they knew it was just a time game knowing they couldn't sustain the prices at those low levels ...

the American Bakken oil producers knew this too ... how many survived and will revive their production will yet to be seen ... both are gonna check back other info a game of cat and mouse ...



Edited 1 time(s). Last edit at 12/01/16 19:29 by Out_Of_Service.

The Iran bail out via sanctions removal also legalized some oil that had been on the black market.

Posted from Android

Back when "benchmark" crude was going for $100 a barrel, I had some money to invest, so I asked my adviser to find a good energy related mutual fund.  Seems like just a few months after I "placed my bet", crude went down to the $40-50 range.  Everyone here in Southern California who sees "regular" at $2.69 a gallon instead of $4.09 should thank me (the "don't take this seriously" light is on).

It is unlikely that anybody will uncork closed wells until they see whether the OPEC agreement holds. Past agreements suggest rampant cheating is ahead.

Posted from Android