US Largest Global Crude Producer

Now here is something the left probably never wanted to be number one at.

San Antonio Business Journal

Sep 12, 2018, 2:46pm CDT Updated 2 days ago Production in the nation’s shale basins has helped the U.S. surpass Russia and Saudi Arabia to become the world’s largest crude oil producer, preliminary figures from the Energy Information Administration show.

American exploration and production companies are now producing an estimated 10.9 million barrels of crude oil per day, according to the EIA’s latest Short-Term Energy Outlook report released on Wednesday. Based on preliminary data, EIA officials believe that crude oil production in the U.S. surpassed Saudi Arabia in February and surpassed Russia twice — once in June and again in August.

The figures mark the first time that domestic crude oil production has surpassed Saudi Arabia in more than two decades. Although the EIA does not publish crude oil production forecasts for Russia and Saudi Arabia, the agency expects that U.S. crude oil production will continue to exceed that of Russia and Saudi Arabia through 2019.

https://www.bizjournals.com/sanantonio/news/2018/09/12/united-states-now-the-largest-global-crude-oil.html

Oops, the energy denier crowd is not going to like that. The second part of the oil issue is why the rise in gas prices? Now that sanctions will be back on Iran, it will be another excuse for higher oil prices. Though when they dropped Iran sanctions, the only beneficiary was Iran and a few of its trading partners. Of course on the left they would enjoy sky high gas and energy prices. At least for the time being congrats to US anyway.

Winners and Losers of the week

Fox heavyweight Charles Krauthammer has interestingly called special counsel, Robert Mueller the winner of the week. His loser was McMaster. It’s all in how you see it.

NRO – National Review – had the story:

Charles Krauthammer named H. R. McMaster his “loser of the week” due to his damaged reputation, and then he explained why the winner of the week was Robert Mueller:
My loser: H. R. McMaster, the national-security adviser. On the night of the report of Trump spilling secrets to the Russians, he was one of several trotted out to say the story was false. The next day, he is contradicted by Trump who said he was within his rights to say what he said, implying that he did say it and the story was true. McMaster holds a press conference the next day, where he had to reconcile the irreconcilables. It was a sad sight for a man who spent decades establishing a reputation for integrity and consistency.

My winner is Robert Mueller, who is going to be the chief investigator for the Russia probe. He is now the man who is in charge who has a mandate to investigate essentially anything and is politically untouchable, cannot be fired. Technically he can; politically he can’t. He’s the most powerful man in Washington.

Read more at: http://www.nationalreview.com/corner/447818/robert-mueller-russian-probe-special-counsel-most-powerful-man-washington

 

If Mueller is the latest standard, allow me to write the new definition for Webster’s:
Winner in that you get an unlimited appointment with an unlimited mandate, and then get get to move your entire law firm into it. – Winning.

And winning is when your own conflict of interest is irrelevant or ignored unanimously by your peers.

My loser of the week has to be Obama, who was instantly driven further into exile by Trump’s new trip to Saudi Arabia. The country that could not be bothered to roll out the red carpet treatment for Obama is quite relieved that he is gone, and definitely not missed by the Saudi government.

It became even more clear after the arrival how much Obama was despised, a bright red carpet and reception for Trump. It seems to take a real bad thing to recognize a good thing.

Also big losers are those Democrats, media, race baiters and haters who are left in Obama’s vacuum to defend his lousy legacy of lies. Losing.

Death of a price point

Now with the death of Saudi King Abdullah, the flurries of questions began. What about the oil market, prices in particular, and what effect new leadership will mean for oil?

Well, complex answers don’t stop reporters from asking, except maybe in the case of Obama. The go to man is apparently Prince Alwaleed. He gave a robust defense of supply and demand, then shocked probably even OPEC countries by declaring we will never see triple digit oil again. In fact, he said we will never see hundred-dollar oil prices again.

See CNBC for video and article: http://www.cnbc.com/id/102363511

“I can assure you that Saudi Arabia is not using the oil price right now to impact the fracking industry in the United States,” he said, adding that “there’s an oversupply and demand is not so high.”

He insists there will be little change on current oil policy from a King Salaman government. He does have a grasp of understanding about the subject. It’s obviously true the current prices do hurt the Kingdom. It also hurts other oil-dependent countries. But his point was if they cut production that “gap” would only be filled by some other country. And it would. So it seems their production level alone is not running the market. The dynamics indeed have shifted since the US began producing more.

Now there’s one voice on the record publicly declaring the death of triple digit oil. That in itself should be a big deal. So stick a fork in hundred-dollar oil?

If Charlie Hebdo killings anger you….

At the very same time Saudi Arabia was condemning the Charlie Hebdo terrorism, this took place.

Meanwhile, Saudis Lash Blogger for “Insult” to Islam

by IPT News • Jan 9, 2015

For sheer brutality, it pales in comparison to the massacre of journalists and cartoonists Wednesday at the Paris office of Charlie Hebdo, but Saudi Arabia’s flogging of a liberal blogger Friday further shows how rooted the concept of violence is in response to any insult of Islam.

Raif Badawi was sentenced to 1,000 lashes – he received the first 50 in a public square in Jeddah Friday – along with 10 years in prison and a fine equal to $266,666, Reuters reports. His crime? Creating a website called “Free Saudi Liberals,” which advocated greater religious freedom. Saudi Arabia found this “insulting to Islam.”

In a statement, the International Humanist and Ethical Union called Badawi’s punishment “savage, and an absolute violation of human rights and dignity” intended to cow other potential free thinkers into silence.

“Only yesterday it was reported that Saudi Arabia condemned the Charlie Hebdo shootings, and yet the authorities choose this week to brutalize a young man because he had the audacity to stand up and say that his countrymen should have greater liberty,” Union spokesman Bob Churchill said. “The Saudi state’s condemnation of terror in Paris is hypocrisy of the highest order.”

Amnesty International also condemned Badawi’s treatment as “a vicious act of cruelty which is prohibited under international law” showing Saudi Arabia’s “abhorrent disregard for the most basic human rights principles.”

The Paris jihadists acted on their own belief that Charlie Hebdo’s cartoons were a crime against Islam warranting mass slaughter in response. Badawi was flogged at the demand of a national government, one which was invited to join the United Nations Security Council just two years ago and turned it down.

This has been a horrible week for violence waged in defense of Islam. It’s not a great week for those who insist this violence is rooted in anything but theology.

http://www.investigativeproject.org/4725/meanwhile-saudis-lash-blogger-for-insult-to-islam

Oil illusions and/or delusions – pt 2

(Part 2)
What is interesting is that for years we heard the Mid East production level adjustments, such as OPEC’s or Saudis’, had little to do with the price we were paying for refined goods. When we complained in general about high oil prices, we were told their decisions and production had really no effect on overall prices. We are always reminded that supply and demand are driving those prices. It’s the hidden hand of the economy.

But now we have a situation where Saudis are actively flooding the market with their oil to drive oil prices down, which makes it hard for others to do business. So are they now admitting Saudis’ production control has an effect on prices? Yes, they are. Flashback to all those times we were told it was only consumer demand, no foul. We were imagining things. Remember, they said the free market was setting those prices. Which is it?

Apparently, someone woke them up and told them the power they have over oil prices. Who let that out of the bag? Do you think it took them all these years to realize it? And took our domestic fracking ability and development to show them? Anyway, now they know the dirty little secret and are using it against us to curb our ability to produce.

Here is a newer article examining the issue that Saudis are at war with our domestic production. He compares this reaction to the subprime bubble, and presumably meltdown, as the perfect analogy.

As soon as oil’s price headed in the undesired direction in this highly leveraged market, the dreams evaporated, just as they did in the highly leveraged housing market. The debt of the most indebted producers, now losing money, is worth less than face value. Their creditors will eventually recognize losses. As previously noted, the one wrinkle is that so many producers are governments. They have not, in most cases, explicitly backed their debt with oil revenues, but they had assumed those revenues and based their future spending plans on them. Call it “soft” debt. — Robert Gore; straightlinelogic

Long ago I figured if Saudis’ had real fear about Iran, they could put pressure on the market and oil prices, which Iran is dependent on. This would have the effect of sanctions. Maybe this is what they did, or maybe they are only reacting to us? If we listen to these economists, Saudis are responding namely to us.

I admit having a bias that I prefer to buy gas below 3.00 to paying about 4.00 per/gallon. (or at 2.00) At 4.00 per/gallon, the fracking is more profitable. So am I supposed to be happy knowing they are producing and growing, and just pay 4 dollars and shut up?

I realize how much high prices affect the whole economy. So that works in favor of my bias for lower prices. Am I to say: our economy is sputtering and people can’t afford the high costs… but at least we are producing more oil, thank goodness? I’m not there yet.

On the other hand, should I worry prices will decline so far the market will collapse to where no drilling is profitable? Well, I already heard one person put it this way: ‘you have to produce something before it is consumed.’ IOW, oil must be profitable to be produced, so we can consume it — in all its forms. If it is not, we will not have it available.

But in that case, prices would go up due to lacking supply, per supply and demand.

Here is an interesting article about the scoreboard

Biggest Winners and Losers of International Oil Price Crash

By Isaac Arnsdorf Dec 4, 2014 | Bloomberg

Oil prices around the world have fallen more than 38 percent since the year’s high in June.

Among the winners are airlines, which are saving on fuel and not reducing fares for customers. Bank of America Corp. predicts earnings will gain 73 percent in 2015.

Saudi Arabia flexed its muscle at November’s OPEC meeting by overruling other members, showing that it’s still the dominant producer. The desert kingdom needs oil at $83.60 a barrel to balance its budget, according to the International Monetary Fund, but it’s got $736 billion in reserves.

Apollo Global Management LLC, the New York buyout firm run by billionaire Leon Black, announced the sale of shale driller Athlon Energy Inc. on Sept. 29 — before oil dropped 29 percent.

More on Bloomberg

See the list of winners and losers. Saudis need 83.60 and currently it is below that, though they have substantial revenues.(they should) Iran needs 117. And we know that OPEC members cheat on quotas anyway. They probably want to sell what they can even at a lower price. But I don’t see articles about the negative effects to them.

I know it’s a complex issue. Yes, lower prices are hurting the producers, like fracking and development. It is in Saudis interest that we decrease our production.I understand the price declines are undermining fracking. Hey, there’s an angle for the enviro-gurus. They should favor lower prices. Though judging market effects as either good or bad is tougher. And motives can be almost as hard.

[My past article]

RightRing | Bullright

Oil boom, doom and gloom

I have to take some disagreement with the general views in this piece.
So I’ll take some issue with it.

OPEC Messes With Texas

by Kristin Tate 28 Nov 2014 | Brietbart

It’s official: OPED has declared war on Texas gas and oil. During a meeting in Vienna yesterday, OPEC countries kept crude oil output targets unchanged. The policy is likely to cause trouble for U.S. oil production, much of which is conducted in Texas.

As to not lose market share to the American fracking boom, Saudi Arabia has inundated the U.S. with cheap oil. The intention is to push U.S. producers out of the market space.

Crude oil is currently selling for around $70 per barrel. At this rate, much U.S. drilling could become unprofitable. Leonid Fedun, oil tycoon and vice president of OAO Lukoil, said that some U.S.-based producers are at risk of becoming “victims of their own success,” according to Bloomberg News.

Fedun reportedly said, “In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again. The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish….The major strike is against the American market.”

Fracking helped transform Texas into an energy powerhouse. The process — which involves blasting water, sand, and other chemicals deep into the ground the bring up oil and gas — has allowed for cost-efficient oil extraction. Earlier this year, the Lone Star State was projected to produce 3.4 million barrels of oil by the end of 2014. If this threshold is met, Texas alone would likely outproduce every OPEC nation except for Saudi Arabia, the world’s cheapest oil producer.

To combat the competition posed by U.S. fracking, Saudi Arabia has flooded the market with cheap oil. So far they have been successful, wiping out “hundreds of billions of dollars in equity value from the market capitalization of U.S.-traded securities,” according to the Dallas Morning News. […\]

More: http://www.breitbart.com/Breitbart-Texas/2014/11/28/OPEC-Messes-With-Texas

Well, I don’t buy all that. As if lower prices hurt us not help us. The eye always has to be on the longer term. Not to be beholden to OPEC’s and Saudis’ agenda would be a good thing. We’ve been strictly reactionary too long.

Also break that down, the other people hurt by collapsing prices — which were over inflated to begin with — are Iran and Russia. Should we accommodate their wishes for higher prices? The market will drive costs down, with the right policy adjustments.

The expense of building our infrastructure was a big part of getting started. Now that is well under way. The cost curve in most things inevitably bends downward. But meanwhile, price reduction does break the bubble of conventional wisdom on oil — over the last six or so years. So those players are not happy.

I think it is a positive that OPEC has not cut production. Saudis know those high prices were helping Iran. I would hate to fall in line with the agenda of Russia and Iran.

If it is a “war”, let’s examine the other side’s motives for a minute. A war means that they, predominately socialist economies, are inflicting lower prices on us as a weapon. Do you remember price wars? Who benefits by those? So now we are worried about the lower prices of oil, because the prices of heating fuel oils are still high. Have you checked, too, the difference in prices between regular and upper grades of gas? I’ve seen 60 an 70 cents per/gal differences.High test is only where regular was months back. Since when are lowering prices a problem?

I’ve read elsewhere that at 65$ per/barrel fracking etc is still profitable. And Iran needs about 117 per/barrel to fund themselves.(part of which is their terrorism outreach) And the profit margin still appears to be there in the refined products.(crack spread [1]) Maybe its me, but I’d think our government poses a bigger threat to the industry(bottom line) than Saudis flooding us with cheap oil.

But the way it hurts those mostly socialistic economies is worse, in effect, than what we see here. The article mentions the mitigating factor, Texas is invested in much more than oil. Even in the Midwest there is a lot more to the economic story than oil prices. Contrast that with Mid East countries. They depend on oil revenue for everything. It pays their bills.

So who is hurting whom? Are we to believe they are intentionally hurting their own economies to spite themselves, just to make it harder on Texas, and the US, to carry out our policies? If they are, that is a competition(challenge) worth engaging in. We need to win in the end by not being hostage to their demands and desires. In the above thinking, I guess we owe a big thanks to Saudis and OPEC for propping up oil prices to help Texas, and develop our resources. In effect, that would mean we are cutting our throats by developing these resources. Thus, they want OPEC cuts and higher prices?

Note: “A crack spread measures the difference between the purchase price of crude oil and the selling price of finished products, such as gasoline and distillate fuel, that a refinery produces from the crude oil. Crack spreads are an indicator of the short-term profit margin of oil refineries because they compare the cost of the crude oil inputs to the wholesale, or spot, prices of the outputs (although they do not include other variable costs or any fixed costs). The 3:2:1 crack spread approximates the product yield at a typical U.S. refinery: for every three barrels of crude oil the refinery processes, it makes two barrels of gasoline and one barrel of distillate fuel.” –  eia.gov

RightRing | Bullright

ISIS and CIA , Saudi Arabia’s Islamic State

Conventional wisdom, what is conventional in Iraq or Mid-East for that matter?

Suspicions Run Deep in Iraq That C.I.A. and the Islamic State Are United

SEPT. 20, 2014 | NYT

BAGHDAD — The United States has conducted an escalating campaign of deadly airstrikes against the extremists of the Islamic State for more than a month. But that appears to have done little to tamp down the conspiracy theories still circulating from the streets of Baghdad to the highest levels of Iraqi government that the C.I.A. is secretly behind the same extremists that it is now attacking.

“We know about who made Daesh,” said Bahaa al-Araji, a deputy prime minister, using an Arabic shorthand for the Islamic State on Saturday at a demonstration called by the Shiite cleric Moktada al-Sadr to warn against the possible deployment of American ground troops. Mr. Sadr publicly blamed the C.I.A. for creating the Islamic State in a speech last week, and interviews suggested that most of the few thousand people at the demonstration, including dozens of members of Parliament, subscribed to the same theory. (Mr. Sadr is considered close to Iran, and the theory is popular there as well.)

http://www.nytimes.com/2014/09/21/world/middleeast/suspicions-run-deep-in-iraq-that-cia-and-the-islamic-state-are-united.html?_r=2

The Islamic State . . . of Saudi Arabia

Between beheadings, they’ll help train the “moderate” Syrian rebels.
By Andrew C. McCarthy | NRO
September 20, 2014

The beheadings over the last several weeks were intended to terrorize, to intimidate, to coerce obedience, and to enforce a construction of sharia law that, being scripturally rooted, is draconian and repressive.

And let’s not kid ourselves: We know there will be more beheadings in the coming weeks, and on into the future. Apostates from Islam, homosexuals, and perceived blasphemers will face brutal persecution and death. Women will be treated as chattel and face institutionalized abuse. Islamic-supremacist ideology, with its incitements to jihad and conquest, with its virulent hostility toward the West, will spew from the mosques onto the streets. We will continue to be confronted by a country-sized breeding ground for anti-American terrorists.
Advertisement

The Islamic State? Sorry, no. I was talking about . . . our “moderate Islamist” ally, the Kingdom of Saudi Arabia.

But the confusion is understandable.

Islamic State terrorists have infamously decapitated three of their prisoners in recent weeks. That is five fewer than the Saudi government decapitated in August alone. Indeed, it is three fewer beheadings than were carried out in September by the Free Syrian Army — the “moderate Islamists” that congressional Republicans have now joined Obama Democrats in supporting with arms and training underwritten by American taxpayer dollars. […/]

http://www.nationalreview.com/article/388460/islamic-state-saudi-arabia-andrew-c-mccarthy

Prescription for ISIS

Short of wiping out ISIS which is needed, fast and furious, I have another prescription for ISIS that Obama can do on top of that. I think you will like it.

First. Obama has several times said they are not Islamic. True, Bush made similar stupid remarks about al Qaeda. Second, the Saudis are even concerned and said if ISIS is left unchecked, they could be in Britain or the US in months .

So they are a threat to the world and other Muslim countries. They should be a threat to other Muslims. That’s what we hear anyway. But they definitely threaten the world and humanity, and the future of mankind. If you threaten a species you are singled out and scorned. If you threaten humanity, oh well.

Now for the prescription. But because Barry has been so adamant and defiant about it, I suggest that he personally carry it out himself, not delegate it to anyone else. It’s simple communication, so he can handle it. It will make his theory more credible.

Simply go to his Saudi friends to give them a message. Since they are an authority in Islam and Wahhabism, then they can have a fatwā created and issued on ISIS and what they’re doing — rejecting the Islamic legitimacy of ISIS, telling Muslims not to take part in it in any way. They should have no problem if they disagree with ISIS’s credo. The guys in Riyadh can come up with something that delegitimizes them. And revoke their Mecca card. Even get a qaļā, a legal ruling, conveying similar sentiments.

If Obama believes as he says, he should have no problem doing that. So this is your mission, Barack Obama, should you accept it.

RightRing | Bullright

UAE Oil Minister Says Oil Prices Are Not a Threat to Global Economy

Published May 27, 2013 – Fox Business

Crude oil prices are at a fair level and aren’t posing a risk to the global economy, United Arab Emirates’ new energy minister said in remarks published Monday, signaling a consensus among OPEC members over prices.

“From the producers” point of view, the current price level continues to be an incentive for the ongoing investments that are necessary to increase oil production capacity,” Suhail Al Mazrouei told the state-run news agency Wam. “As for consumers, this level does not adversely affect economic recovery and the prospects of growth in the future.”

However, OPEC kingpin Saudi Arabia may have to persuade other members of the group to cut output to keep oil prices above $100 a barrel for the rest of the year, the kingdom largest unlisted lender National Commercial Bank said in a note.

Read more: http://www.foxbusiness.com/news/2013/05/27/uae-oil-minister-says-oil-prices-are-not-threat-to-global-economy/#ixzz2UbL2x4wa

So if the UAE oil minister claims prices have no ill-effect on economies, and gas and oil prices are in line, then why do so many Arab countries subsidize their domestic energy? Why don’t they follow their talk and allow market prices on their domestic energy? Let’s see if that has any negative effects on their economy?

Research paper:
“Arab Human Development Report”- by Bassam Fattouh and Laura El-Katiri

The policy of maintaining tight control of domestic energy prices has characterized the political and economic environment in most Arab countries, together with many other parts of the world, for decades. The objectives behind such a policy range from overall welfare objectives such as expanding energy access and protecting poor households’ incomes; to economic development objectives such as fostering industrial growth and smoothing domestic consumption; and to political considerations, including the distribution of oil and natural gas rents in resource-rich countries.

Energy subsidies distort price signals, with serious implications on efficiency and the optimal allocation of resources. Energy subsidies also tend to be regressive, with high-income households and industries benefiting proportionately most from low energy prices. However, despite such adverse effects, energy subsidies constitute an important social safety net for the poor in many parts of the Arab world, and any attempts to reduce or eliminate them in the absence of compensatory programmes would lead to a decline in households’ welfare and erode the competitiveness of certain industries.

Anyone want to take bets on what effects it would have on their economies and growth?

Middle East Oil Power

In keeping with the energy oil theme, I found this article by Victor Hansen Davis:

http://www.nationalreview.com/article/347108/irrelevant-middle-east

An Irrelevant Middle East

Thanks to oil discoveries elsewhere, the region is losing its geostrategic clout.

Yet the Middle East is becoming irrelevant. The discovery of enormous new oil and gas reserves along with the use of new oil-recovery technology in North America and China is steadily curbing the demand for Middle Eastern oil. Soon, countries such as Kuwait, Saudi Arabia, and Iran are going to have less income and geostrategic clout. In both Iran and the Gulf, domestic demand is rising, while there is neither the technical know-how nor the water to master the new art of fracking to sustain exports.

In it, he talks about t the Middle East situation and the changing dynamics. Would anyone in the Middle East really take a second to realize the only reason we care anything at all about their cute little governments and relationships is the oil and dependency situation. Oh, and now for Israel too, who happens to live in a very troubling neighborhood. But its the oil that supplies them the money and power that fuels their influence.

But a new dawn is breaking. As Hanson points out, with the new technology and discoveries, it’s all too clear that the old situation is giving birth to a new one. One thing that has interested me for as long as the concerns of Iran have been at the fore, is the price of oil. Iran has admitted that it needs a price point of 117 a barrel to satisfy their demands. Whether this is by wish or necessity matters little. They have been fortunate enough in the last few years to benefit from oil prices and spikes.

Now as Victor suggests, with these new developments it could sort of “spread the wealth” around. Oil sheiks may not laugh it off as proudly as they once did. And more of their production is going to feed domestic demands than ever. So what to do if you are a rich oil sheik in say Saudi Arabia? Well, they might be looking for other lucrative businesses. As some of the oil money dries up, or they receive  less of a share than they’re used to, they will have less of those petro dollars to buy influence around the world. Their loss might well be our gain.

Back to the neighborhood. If they have less expendable world oil money, they become less of a problem for Israel. How you say, because their radical culture still exists? Well, the funny part is that with Israel’s discoveries it puts them higher on the totem pole than Arab sheiks. Call it a balancing. They can resent it all they want but it will not change that coming paradigm. And Israel, actually having a functioning burgeoning economy, will benefit all the way around while their economies based almost entirely on oil, and exporting jihad, may take a distant backseat to that real economy.