And there was much rejoicing in the land.... Gas Prices

[Strychnine]

Also...OPEC isnt as steadfast as they were last year...but still no major developments.

..

Developing: OPEC Decides To RAISE Output Ceiling - Oil Plummets

Ahead of the announcement of OPEC's official decision later this morning, several OPEC delegates said the group has decided to raise its 30 M/bpd recommended production ceiling to 31.5 M/bpd. If these delegates are correct, today's decision reflects a recognition of OPEC's existing production levels- it has adjusted the recommended ceiling to actual levels of production. Bloomberg is reporting that decision was made partly to include room for Iranian oil, set to be released into the global market early next year after Western sanctions.

Specifically, the new 31.5 M/bpd ceiling is reflective of the reality that OPEC has been producing beyond 30 M/bpd every month this year. In October, the group produced about 31.4 M/bopd, according to its monthly market report. Thus the new ceiling is reasonably close to the group's most recent estimate of actual output compiled from secondary sources. Notably, Bloomberg notes that the group has previously realigned output targets per secondary source estimates.

Oil prices reacted swiftly to the announcement. Brent dropped 2.1% to $42.93 a barrel, and West Texas Intermediate fell 3.1% to $39.81.



It appears initially that our reporting that Saudi's attitude- its posture- towards its rival oil producers would be more antagonistic was also a factor in today's decision. 1) The emergence of Russia as Saudi's principal market share competitor, 2) the impending return of Iranian oil to the global market next year, and 3) the heightened geopolitical tensions between Saudi and both Russia and Iran over the Syrian and Yemen crises, appears to have formed a large part of Saudi's "mental furniture" in Vienna.

The Saudi-led group's decision comes despite the clamors of OPEC's poorer members for it to curb output. In recent weeks, Venezuela, Iran, and Algeria have been among the countries that have urged OPEC to curtail production. Prior to the meeting, Saudi Arabian oil minister Ali Naimi said that rising global demand could absorb an anticipated increase in Iranian production next year amid the lifting of Western sanctions.

With regard to demand, China will likely double its strategic crude oil purchases in 2016 to take advantage of collapse in oil prices. China is forecast to add 70-90 million barrels of oil to storage tanks next year in order to build up its SPR, according to a majority of respondents in a poll of five analysts and data compiled by Reuters analysts.

[Ruffdaddy]

..

The key take away i got was that they actually didnt agree to the increased production levels...even to reflect reality. They are also starting to soften to the idea of coordinated cuts.

Its still gonna be greasy for the next year or so though.

[Sean88gt]

I was really hoping to see oil dip below $30...until I'm gainfully employed in some O&G in-house counsel gig, then raise that shit through the fucking roof!

[Ruffdaddy]

I was really hoping to see oil dip below $30...until I'm gainfully employed in some O&G in-house counsel gig, then raise that shit through the fucking roof!

Youre just a hater of other peoples success. Hating on MBAs, hating on O&G...etc etc.

I never took you for a democrat.

[Sean88gt]

Youre just a hater of other peoples success. Hating on MBAs, hating on O&G...etc etc.

I never took you for a democrat.

Naw, I just like cheap gas and companies run in an ethical manner. Although, spreadsheets aren't unethical, just the little fucks manipulating them. If I end up becoming a prosecutor, I'll switch parties and run for a judge spot, because that's the game.

And I'll probably end up finishing my Master's at some point. I started and changed directions.

[Ruffdaddy]

Naw, I just like cheap gas and companies run in an ethical manner. Although, spreadsheets aren't unethical, just the little fucks manipulating them. If I end up becoming a prosecutor, I'll switch parties and run for a judge spot, because that's the game.

And I'll probably end up finishing my Master's at some point. I started and changed directions.

I was just fucking with you...i didnt expect you to bend over so easily like a baby back bitch.

[03mustangdude]

We need oil in the 70-80 level that would be ideal.

I'm thinking it will drop to under 30 before the end of the year though

[cobrajet69]

I was just fucking with you...i didnt expect you to bend over so easily like a baby back bitch.

Feed him a cheap cut of steak and some Jim Beam and watch him bend over like a cirque du solé contortionist.


David

[Sean88gt]

I was just fucking with you...i didnt expect you to bend over so easily like a baby back bitch.

Ribs sound good. I know you were fucking with me, I'm in super cereal finals mode so sarcasm may not be coming across as I intend it. But vote for me regardless.

Feed him a cheap cut of steak and some Jim Beam and watch him bend over like a cirque du solé contortionist.


David

A $9 steak is a $9 steak, bro!

[cobrajet69]

LOL


David

[Strychnine]

WTI went under $37 this morning

Halli-Baker's Anti-Trust Headache Becomes A Migraine - A New Challenge Emerges

Since the Halliburton - Baker Hughes merger was announced more than a year ago, anti-trust concerns have plagued the deal's path to closing. Regulators from the US DOJ to the EU Commission have scrutinized the deal, seeking more information than normal from the companies given their overlap and size and demanding divestitures to improve competition.

On Monday, a new challenge emerged from Brazil, where the competition committee has said the consolidation will lead to price increases for the combined company's services.

Brazil's Challenge
In a statement issued today, Brazil's CADE court (their anti-trust regulator) joined in the chorus of concerns, writing in an official communique: "various elements suggest that the transaction may result in price increasing in several markets related to the company’s playing field, since the sector has high barriers to entry and there would be a situation of lower competition in the post-merger scenario."

Petrobras is Halliburton's biggest customer in Brazil, and the Brazilian regulator is motivated to do what is in the NOC's best interest.

The CADE statement went on: "CADE’s opinion also concluded that the company resulting from the transaction might concentrate market power and coordinate effects in the analyzed markets, since Halliburton and Baker Hughes can offer in a integrated manner (in packages) a wide range of services and products, in addition to the existence of a single competitor from their size and competitive technological capacity."

CADE's opinion will now be considered by the CADE Tribunal, which will be responsible for approving, blocking, or "adopting remedies." The Tribunal's deal may be applied unilaterally or following an agreement with the parties.

Brazil may not have a final answer for Halliburton until somewhere between mid-March and mid-June 2016.

Anadarko plant explosion in Orla, TX last Thursday

OPEC's Oil Market Disarray Looks Like 1990s Slump All Over Again

OPEC has dropped any attempt at trying to fulfill its founding mission and manage the oil market, sending global benchmark Brent crude to a six-year low. For Saudi Arabia’s Ali al-Naimi, the most powerful and longest-serving of the group’s oil ministers, it may have seemed like history was repeating itself.

There are several striking parallels between the Organization of Petroleum Exporting Countries’ current situation and the period from 1997 to 1999, when the group lost control of the market and oil slipped to less than $10 a barrel. While investors may wonder whether markets will follow a similar trajectory this time, it’s important to remember that OPEC emerged from the crisis to see oil prices surge all the way to almost $150 a barrel. If the parallels hold, markets could be in for a wild ride.

Big OPEC Members Boost Production
Nearly two decades ago, Venezuela had a growth spurt that lifted its output from 2.2 million barrels a day in 1992 to 3.5 million barrels a day six years later. Saudi Arabia responded by increasing its own production, flooding the market. This time around, Saudi Arabia has embarked on a production spree -- pumping a record of 10.6 million barrels a day earlier this year -- while Iran plans to boost daily output by as much as 1 million barrels next year after sanctions are lifted.

Slowdown in Asia
As OPEC lifted production in 1997, Asia headed into economic meltdown. The devaluation in July that year of the baht, the currency of Thailand, triggered a financial crisis that pushed Indonesia, Malaysia, Philippines, Singapore and Thailand into recession. The group’s GDP contracted 8.3 percent in 1998, compared to growth of 7.5 percent on average the previous decade, according to data from the International Monetary Fund. While Asia isn’t collapsing this time around, China is experiencing the slowest expansion in 25 years.

The Indonesian Connection
Back in 1997, OPEC decided at a meeting in the Indonesian capital to raise production quotas just as the Asian economic crisis began, sending oil prices as low as $10. Veteran oil ministers still refer to the “ghost of Jakarta” that haunts their decisions. Indonesia has now returned to the center of OPEC after the nation rejoined the group last week after suspending its membership in 2009.

El Nino
The oil slump of 1997 to 1999 was compounded by El Nino, which curbed demand for heating fuel by warming the ocean surface in the equatorial Pacific and making fall and winter in the Northern hemisphere milder than normal. Fast forward to 2015 and El Nino is already comparable to the record events of those years, according to the Bureau of Meteorology of Australia. Heating oil stockpiles in the U.S. and northern Europe are high, potentially affecting overall crude demand.

Political Change in Venezuela
Venezuela saw an abrupt political change in December 1998 when Hugo Chavez won presidential elections, ushering in a new era of socialism and triggering an oil u-turn. Chavez joined Saudi Arabia in cutting production, ending a decade of increases, while his policies slowly drove out many of the country’s foreign oil investors. After 16 years of uninterrupted “Chavismo,” the nation’s crude production has fallen by 10 percent and the opposition has just won its first elections, taking a majority in Congress.

Naimi vs Zanganeh
Just as they were nearly two decades ago, Saudi Arabia’s al-Naimi and Iranian Oil Minister Bijan Namdar Zanganeh stand in opposition across the conference table in Vienna. Both have a long history of working together to resolve oil gluts, but the differences loom larger this time as their nations’ conflicting positions on Syria, Yemen and Iraq get in the way of the business of oil.

[Strychnine]

The result of a small oil tools company not having an HR department

[mstng86]

Something sports related to this topic.

Is there any chance the owners of the Rangers start to feel the pinch and consider selling the team?

[KBScobravert]

The result of a small oil tools company not having an HR department

Pretty good parody.

[Strychnine]

WTI under $36 today.

Oh, and it turns out Syrira is ISIS' largest customer for bootleg oil even though they are trying to kill each other.


I'm guessing -13 on rig count.