# OPEC Taking Aim at American Shale Oil



## Denton (Sep 18, 2012)

OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says - Bloomberg

Oil sinks below $68 as OPEC keeps output target unchanged - MarketWatch

Saudi Arabia is willing to drive oil prices into the dirt if it halts the U.S.'s shale oil production. While we are paying less at the pump, this is going to affect jobs.

On top of that, we know energy wars are not just a myth. Could this lead to more than just a loss of jobs?


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## Inor (Mar 22, 2013)

This is an interesting one because it is also hurting the Russians badly. (I do not know if Russia is a member of OPEC or not.) The $64,000 question is whether the American/Canadian shale oil companies can weather the storm better than their Russian counterparts. Add on top of that, Venezuela, who is a member of OPEC and whose economy is already in a shambles, it could get REAL interesting.

The up-side to all of this is actually pretty good. It may lead to OPEC falling apart. And it may force the American/Canadian shale oil companies to find new and cheaper ways to extract the oil. Let us hope our engineers are up to the task.


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## Diver (Nov 22, 2014)

Denton said:


> OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says - Bloomberg
> 
> Oil sinks below $68 as OPEC keeps output target unchanged - MarketWatch
> 
> ...


Well, most of the cost is in the drilling and bringing online a new well, refining, and transportation, etc. OPEC has the ability to produce enough cheap oil to make new production uneconomic, but the stuff that has already come online is here to stay. It seems to me that if OPEC drives down the price, we get even cheaper oil than the shale development gives us, which will be good for non-oil industry jobs, and if they don't drive down the price then oil industry jobs will remain strong. Either way energy is a good news story for the moment.


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## James m (Mar 11, 2014)

I could only guess but im going to assume that middle eastern oil can hold prices low for quite a time. Being that they have very cheap labor and countries have been buying for a while so they would have a good cash stockpile. 

Hey wait a minute. Russia went bankrupt. So why can't they finagle something to push the middle east in to bankruptcy? Probably cause more problems in the long run.


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## Smitty901 (Nov 16, 2012)

We get about 10-11% of oil products from The Middle East. It is Europe, China. France ect that get oil from the middle east. If we did not export any we could get by a long time. Liberals in this country are being paid to support shutting down anything real form of energy production . They just keep shoving the Phony Green thing in our faces. Germany burns almost 33% coal where is the outrage as we shut down coal in this country.
Wake up you are being had big time.


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## James m (Mar 11, 2014)

China and India were listed as the world's biggest polluters. Don't hear anything about that.


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## Seneca (Nov 16, 2012)

Which ever oil producer can out produce the other oil producers can either increase or decrease production and control the market. It use to be the US in that position, until 1972, it has been OPEC ever since. Now the US is set to regain that position, through the use of oil shale, which we have an abundance of, the noise you are hearing is OPEC not liking the idea of going back to playing second fiddle.


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## Camel923 (Aug 13, 2014)

Lots of different angles here. The crown jewel is to squeeze the American and Russian oil production at the same time. Also drops Iranian revenues as they near completion of a functional nuclear device.


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## alterego (Jan 27, 2013)

Opec nations are cooperating with the US to drive down the price of oil.
It is a form of economic warfare against the Russia and China trade deal. To insure that the US dollar stays pinned to the oil exchange. The opec nations security as nations and states depend on it.


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## Diver (Nov 22, 2014)

alterego said:


> Opec nations are cooperating with the US to drive down the price of oil.
> It is a form of economic warfare against the Russia and China trade deal. To insure that the US dollar stays pinned to the oil exchange. The opec nations security as nations and states depend on it.


How does any member of OPEC's security depend on having oil trade in dollars? Why would the OPEC nations want to engage in economic warfare against Russia or China?


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## HuntingHawk (Dec 16, 2012)

After doing some reading, it seems Saudi Arabia's main concern is if the US starts exporting that shale oil. Saudi Arabia was making plenty of money when oil was $10/barrel.


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## Denton (Sep 18, 2012)

Interesting take on how Saudi Arabia can't win an oil price war:

Citi: Saudi Arabia Won't Win This Oil Standoff - Business Insider


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## OC40 (Sep 16, 2014)

There are a lot more wheels to this conversation, a few years back I was stationed at Corpus Christi Texas it was there I learned a lot about the inner workings of oil on the nation. The USA's problem in the last 10 years it hasn't been an issue of "having oil" it has been an issue of "moving oil" around the country in a timely manner. We have massive amount bottle necked at the Oklahoma town of Cushing. In 2012 overall U.S. crude inventories now sit at a 21-year high. Remember how much we were paying in 2012 for gas ?? Ouch! 

The conspiracy theories over the last 10 years have been that the USA was purposely burning out oil supplies over seas before they would shift to drilling / fracking within the nation. Now do I believe this?, not really, but it did allow time for the population of the nation to feel the pain forcing them to "get on board" with local oil production. 

The USA is currently the lead exporter of oil, and is projected to be for a very long time because we have adopted these new capture processes. As it was pointed out, Saudi can't play the game for long, but also the constant change in politics is driving the USA away from long term commitments in the region. (like how I PC'd that?) It is an ugly truth but without constant attacks the population of the USA is not going to support any sort of action that secures OPEC nations safety when they (OPEC) could be perceived to fund those organizations. 

The big picture for China, they are a growing nation and will keep consuming oil from OPEC, which many here stateside understood the USA could not remain the number #1 consumer. It put the USA on a "oil addiction" that could allow everything from price fixing and most importantly bring the the US economy to a grinding crawl. I'm not overly worried about OPEC as the outgoing POTUS has barely paid attention to OPEC and most likely the incoming "should be advised" to keep building the nations' oil supply by developing local infrastructure and not return to an "oil addiction" model of importing vast amounts of OPEC oil. This is why, like it or not the Keystone pipe line and other infrastructure projects are important to the US's return to balanced energy model.


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## Denton (Sep 18, 2012)

I checked the price of oil a few minutes ago and saw the price per barrel is currently at 67.28; down 8.7%.

This article seems to think OPEC can win this war:

OPEC might get the last laugh on oil - MarketWatch


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## OC40 (Sep 16, 2014)

Denton said:


> I checked the price of oil a few minutes ago and saw the price per barrel is currently at 67.28; down 8.7%.
> 
> This article seems to think OPEC can win this war:
> 
> OPEC might get the last laugh on oil - MarketWatch


After reading your link I kinda bounced around and stumbled on another link from the same source.

Americans, let?s be thankful that U.S. oil is pulverizing OPEC - MarketWatch

I think there is a key thought in your link, no one really knows where the "pain point" is for fracking. I think and this is my only guess, is that the end game is to finally move away from OPEC oil, the last 20 years OPEC has had a choke hold on the US economy. After the last 8 years of watching the job market shrink and energy supplies increase a smart person would invest heavily in creating a job market based upon developing local energy across all lines, green, coal, and oil.


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## Denton (Sep 18, 2012)

Another article, suggesting OPEC will lose this war.



> In 2012, when U.S. shale burst into public consciousness, common wisdom was that it would cost at least $70 to $75 a barrel to produce. As recently as last week, saying U.S. producers could tolerate $60 oil seemed aggressive.
> 
> But data from the state of North Dakota says the average cost per barrel in America's top oil-producing state is only $42 - to make a 10% return for rig owners. In McKenzie County, which boasts 72 of the state's 188 oil rigs, the average production cost is just $30, the state says. Another 27 rigs are around $29.
> 
> That's part of why oil companies aren't cutting capital spending much - and they say they can keep production rising without spending more, by getting more out of wells they have already drilled.


OPEC is wrong to think it can outlast U.S. on oil prices - MarketWatch


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## Denton (Sep 18, 2012)

Possible good news for those of us along the Gulf Coast...

8 States Where Gas Will Drop Below $2 - 24/7 Wall St.


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## Denton (Sep 18, 2012)

Wow!

1100 hrs, 12 December...oil price is $57.43 a barrel.


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## oddapple (Dec 9, 2013)

I don't know what it will cost us - or I would say crush them to putty and "distribute" their wealth. They sit on a pile of our money. Remove the pile completely


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