OPEC agrees to production cuts

Fuel Fix:
The move took many by surprise.

OPEC members agreed Wednesday to a preliminary deal that will cut the cartel’s oil production for the first time in eight years, boosting hopes in Houston that crude prices will quickly climb above $50 a barrel and accelerate the industry’s nascent recovery.

RELATED: Winners and losers in OPEC’s plan to cut production

Crude prices jumped to nearly $48 a barrel on Thursday, a day after Mohammed Bin Saleh Al-Sada, president of the Organization of the Petroleum Exporting Countries and energy minister of Qatar, announced the deal in Algeria. If finalized at OPEC’s November meeting, the agreement would limit output from the cartel’s 14 countries to about 33 million barrels per day – a drop of roughly 750,000 barrels per day from what OPEC said it pumped in August.

RELATED: Oil prices jump on OPEC’s preliminary deal to cut production

If OPEC can make good on production cuts it could bring global supplies in line with demand by the end of the year, according to the International Energy Agency.
...
This appears to be a surrender to market reality and is a step back from the suicide economics that has been prevalent as the group tried to drive shale producers out of business.   The group had to come to terms with the fact that they were no longer the dominant supplier to the US market.

Whether they have the market discipline to keep the agreement they have reached is still an open question.

In the meantime, US shale producers have become more efficient, which means they will e profitable at lower price points.

Comments

Post a Comment

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Washington Post: Some Democrats eye adding more justices to the Supreme Court to change its ideological bent The once-remote idea has gained the attention of liberals angered by the GOP push to remake the federal courts. Probably the easy way to defeat this court-packing scheme is for Trump to propose doing the same thing now.  It would lead to Democrat denunciations and claims that it would be wrong, thereby blowing up any attempt by them in the unfortunate event of Democrats winning a presidential election.
Read more

29 % of companies say they are unlikely to keep insurance after Obamacare

Conn Carroll: A new survey of 368 midsize to large companies found that 29% of them are considering terminating their active employee health care plans when Obamacare is full implemented in 2014. Only 71% of employers surveyed said they did not expect to drop their health coverage, while 20% said they did not know and 9% said they were planning to exit. The latest survey, conducted by Towers Watson, echoes an ealier survey by McKinsey & Co. finding that 30% of private-sector employers were planning to drop their employee health insurance coverage by 2014. When the Congressional Budget Office crunched Obamacare's spending numbers, they estimated that only 7% of employees currently covered by employer-sponsored plans would lose their plans. ... This means the cost of the health care fiasco will be hundreds of billions more than estimated by the CBO and Congressional Democrat. It is also clear that Obama's pledge that you could keep your health care plan if you wanted t...
Read more

Is the F-35 obsolete?

Headline USA: Pentagon Fires Back after Musk Calls Its Most Expensive Project ‘Obsolete’ 'Yeah, as I'm sure you can appreciate, Mr. Musk is, currently, a private citizen, I'm not going to make any comments about what a private citizen may have to say about the F-35....'   ... ... Drones appear to be replacing jets for many operations.  The Russia-Ukraine war is an example of that.  Drones are often hard to detect and can be used for intelligence operations as well as for attacking enemy targets.  It would not surprise me to see drones engaging other drones in combat.  They also cost much less than manned fighters.  
Read more