Oil and OPEC

Well crap. OPEC met and they couldn't get together on any reduction in production (heads-up-there-asses methinks) and will maintain current levels. Iran will be coming online before long and they'll add about 500K bbls and ramping that up as quick as they can to 1.5M bbls, probably by mid '17. Oversupply is already 1M bbls+ a day.

I really thought they'd get together on some kibd of reduction in production, they all really need for the price of oil to go up, at least somewhat. Here's a break even point for some different countries. Pretty interesting and after reading this I really thought they'd cut some. Oh well, I have time.

Fiscal break-even price


Fiscal deficit (% GDP)


Million barrels per day


Spare capacity (% unused)


Algeria $96.10 -13.90% 1.11 2.63%
Angola $110.00 -3.50% 1.79 2.22%
Ecuador n/a -5.10% 0.53 5.26%
Iran $87.20 -2.90% 2.88 20.83%
Iraq $81.00 -23.10% 4.2 6.94%
Kuwait $49.10 1.20% 2.73 1.42%
Libya $269.00 -79.10% 0.43 20.00%
Nigeria $122.70 -2.80% 1.9 6.77%
Qatar $55.50 4.50% 0.67 5.71%
Saudi Arabia $105.60 -21.60% 10.25 17.13%
UAE $72.60 -5.50% 2.89 2.04%
Venezuela $117.50 -24.40% 2.38 3.21%

EDIT TO ADD: I hit reply before I was finished. While the glut continues, the short futures continue to build along with the short market bets. It's a pretty tightly wound watch right now and any sudden change in production or significant ramp up of demand and that'll cause a huge squeeze, people will run for the exits IMO. I know that's a temp. thing, and of course, I would try to take advantage of a little of that but I'm looking for the long run.

Some of these huge pullbacks I'm not getting. I look at an ETP and know a lot about it, owned it for years and it keeps pulling back. Keeps making the divvy a greater% return, reinvesting in cheaper shares I take as good, I think?

Trying to stay positive in a negative world

Jatki, when you show each country's "break even" data, this may be confusing to some. What I believe what you are showing is what oil price each country requires to fully fund ongoing government budgets without running a deficit. The break even cost to "raise" a barrel of oil is far different from this.

Saudi Arabia's cost to raise oil "likely" averages around $10 per barrel, but the rely on the huge profits to provide the peasants enough free shit to prevent an uprising. Luckily for the Saudi's, they've saved up a huge slush fund allowing them room to weather the storm. Venezuela, on the other hand, is running on the ragged edge. This country is in serious trouble if prices don't increase dramatically within a year or two. Many additional OPEC countries are in serious trouble, also.

I don't think it will go far, but then again I've been surprised before, like today. Today wasn't a "shocker" tho, just a little unexpected. Sorry about the "chart". I couldn't get it to copy very well, did my best( IKnow it sucks).

Jatki, my point is that Saudi Arabia's "break even" on oil is $10, but your chart shows it at $105. I understand the they are screwed and will go broke if oil stays a $40 per barrel, yet $110 isn't their "break even" price for oil. $110 per barrel is what they need balance the budget.

Holding some DWTI shares, which is for the price of oil to go down. Not sure what is going to raise the world oil prices, maybe something very serious in the Middle East (which is always possible). Otherwise production just keeps churning it out.

Goldman Sacs is calling for an oil price of $20 per barrel. Not sure that will happen but I do think we are going to test the lows of mid 30's. If it should close below that level "Katie bar the door" it could easily sink to upper 20's or 30.

The World oil price, best I can tell, will be controlled by one man over the next several years, and that's Ali bin Ibrahim Al-Naimi..........the Saudi Oil Minister. It's possible that there's a man behind the man, but I suspect not.

If he is willing cut OPEC oil production substantially, he ran push the price to over $100 per barrel and beyond. He can also keep production rolling and prices will crumble further. Exxon can't do a damn thing.

I know. I thought that was kinda known, they should've included those figures. UM, I know the Saudi's B/E point is low but I don't think it's ten bucks. For some reason I remember 30ish as the more accurate number.

"On the other side of the coin, Saudi Arabia and Kuwait can pump a barrel of oil for less than $10, on average. Iraq can produce oil for about $10.70 per barrel."

https://money.cnn.com/2015/11/24/news/oil-prices-production-costs/

Much of the Saudi new oil production runs close to $30 to raise, but the great lion's share costs $3 - $10 per barrel to raise.

Hi jatki,
i just read your comments and analysis about opec prices and i must say that there is different break even point for every country that has oil related issue and that has been the problem with every nation. The coming year ie 2016 is not going to be same there will be skyrocketting in the oil prices and its gone be completely diff scenario.

https://www.profitconfidential.com/tag/opec-oil-prices/

Damned if OPEC didn't start a tidal wave. The "talk" Of Kinder possibly cutting their divvy has been atrocious for the MLP's. Barf-a-rooni. Don't even want to look at anything today.