International oil prices rebounded strongly last week, boosted by oil-producing countries or news of joint production cuts. However, given the complex relationship between the major oil-producing countries in the world, it is difficult for them to reach a production reduction agreement, even if it is achieved, it will be difficult to implement. Therefore, supply pressure will still exist.
The main factor stimulating the rise in oil prices last week was news from Russia. Russian Energy Minister Novak told the media on January 28 that some OPEC members suggested that the oil exporting country conference be held in February, and Russia will participate. Saudi Arabia suggested that the oil-producing countries cut production by 5%.
But the news has not been confirmed by OPEC, and according to a report released by Wall Street investment bank Goldman Sachs at the end of last month, OPEC hopes to force high-cost crude oil producers out through low oil prices. To this end, low-cost oil producers such as OPEC and Russia will continue to export crude oil to oversupply markets. Therefore, the coordinated reduction of production by oil-producing countries is an impossible task. Goldman Sachs believes that oil prices need to be maintained at a low enough level to force the development of a balance between supply and demand.
OPEC's crude oil production accounts for about one-third of the world's crude oil market, and the current average daily production is about 32 million barrels. Despite the sharp drop in crude oil prices, the OPEC countries represented by Saudi Arabia not only refused to cut production, but also increased production and non-OPEC countries to compete for market share. However, due to financial pressure, Venezuela and other OPEC oil producers have repeatedly demanded a reduction in production and insured prices, but other OPEC countries do not respond. Iran also made it clear that the amount of crude oil exported by Iran will increase substantially in view of the Western countries lifting sanctions against Iraq.
The shale oil leather orders the US crude oil output to increase greatly. According to the latest data from the US Energy Information Administration, the current average US crude oil output is around 9.2 million barrels. There is no unified organization in the United States to coordinate crude oil production, and large and small crude oil producers adjust production according to the market.
US shale oil producer Ke Tailong said that low oil prices are driving shale oil producers to use advanced mining technology, and mining costs are further reduced. In the past 24 months, crude oil extraction costs have fallen by 30% to 40%. In many shale oil exploration areas in the United States, crude oil mining companies are still profitable when oil prices are around $30. He said that some producers have already seen production cuts. If oil prices fall to between $20 and $21, many miners will be unbearable, many wells will be abandoned, and crude oil supplies will fall.
At the forum hosted by Columbia University's Center for Global Energy Policy last week, Adam Scheinsky, director of the US Energy Information Administration, pointed out that the global supply of crude oil last year was 2 million barrels per day, and this year it was reduced to 1 million barrels to 1.5 million barrels. . He also said that the price of $25 is a lifeline for US shale oil manufacturers. Below this price, companies will not be able to guarantee the cash flow to maintain daily operations. US shale oil production is now falling at a rate of 1% to 2% per month. He predicted that under the condition of low oil prices, global crude oil supply and demand is expected to reach a balance after one year.
Former OPEC Secretary-General and President of the Kuwait Science Development Foundation Adnan Shehabdin believes that the oil production costs of some OPEC oil producing countries are as low as $10 per barrel. He expects low oil prices to be global in the next 12 months. Crude oil production has fallen sharply. He suggested that after the balance of supply and demand in the crude oil market, OPEC continued to increase investment in expansion capacity and avoid a sharp rebound in oil prices by providing sufficient supply.
The main factor stimulating the rise in oil prices last week was news from Russia. Russian Energy Minister Novak told the media on January 28 that some OPEC members suggested that the oil exporting country conference be held in February, and Russia will participate. Saudi Arabia suggested that the oil-producing countries cut production by 5%.
But the news has not been confirmed by OPEC, and according to a report released by Wall Street investment bank Goldman Sachs at the end of last month, OPEC hopes to force high-cost crude oil producers out through low oil prices. To this end, low-cost oil producers such as OPEC and Russia will continue to export crude oil to oversupply markets. Therefore, the coordinated reduction of production by oil-producing countries is an impossible task. Goldman Sachs believes that oil prices need to be maintained at a low enough level to force the development of a balance between supply and demand.
OPEC's crude oil production accounts for about one-third of the world's crude oil market, and the current average daily production is about 32 million barrels. Despite the sharp drop in crude oil prices, the OPEC countries represented by Saudi Arabia not only refused to cut production, but also increased production and non-OPEC countries to compete for market share. However, due to financial pressure, Venezuela and other OPEC oil producers have repeatedly demanded a reduction in production and insured prices, but other OPEC countries do not respond. Iran also made it clear that the amount of crude oil exported by Iran will increase substantially in view of the Western countries lifting sanctions against Iraq.
The shale oil leather orders the US crude oil output to increase greatly. According to the latest data from the US Energy Information Administration, the current average US crude oil output is around 9.2 million barrels. There is no unified organization in the United States to coordinate crude oil production, and large and small crude oil producers adjust production according to the market.
US shale oil producer Ke Tailong said that low oil prices are driving shale oil producers to use advanced mining technology, and mining costs are further reduced. In the past 24 months, crude oil extraction costs have fallen by 30% to 40%. In many shale oil exploration areas in the United States, crude oil mining companies are still profitable when oil prices are around $30. He said that some producers have already seen production cuts. If oil prices fall to between $20 and $21, many miners will be unbearable, many wells will be abandoned, and crude oil supplies will fall.
At the forum hosted by Columbia University's Center for Global Energy Policy last week, Adam Scheinsky, director of the US Energy Information Administration, pointed out that the global supply of crude oil last year was 2 million barrels per day, and this year it was reduced to 1 million barrels to 1.5 million barrels. . He also said that the price of $25 is a lifeline for US shale oil manufacturers. Below this price, companies will not be able to guarantee the cash flow to maintain daily operations. US shale oil production is now falling at a rate of 1% to 2% per month. He predicted that under the condition of low oil prices, global crude oil supply and demand is expected to reach a balance after one year.
Former OPEC Secretary-General and President of the Kuwait Science Development Foundation Adnan Shehabdin believes that the oil production costs of some OPEC oil producing countries are as low as $10 per barrel. He expects low oil prices to be global in the next 12 months. Crude oil production has fallen sharply. He suggested that after the balance of supply and demand in the crude oil market, OPEC continued to increase investment in expansion capacity and avoid a sharp rebound in oil prices by providing sufficient supply.
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