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Oil price is down because SA and Russia have a disagreement. Russia want to produce more barrel. On top of that, the Covid19 happened. Some theorized that SA

Oil price is down because SA and Russia have a disagreement. Russia want to produce more barrel. On top of that, the Covid19 happened. Some theorized that SA and Russian pumping more oil was a plan to kill USA's fracking and shale industry. I'm just hoping it'll force us to move toward renewable so we won't be dependent on these countries.

rckoepke 6y ago
I don't see this. Saudi Arabia has been producing around 10.5 million barrels per day fairly consistently-ish for the last 5 years. If anything it's a bit lower over the past 12 months vs the 60 month average: https://ycharts.com/indicators/saudi_arabia_crude_oil_production https://ycharts.com/indicators/saudi_arabia_crude_oil_produc... So that theory is right out, imo. Russia has increased production only 7-8% in the last 5 years. https://ycharts.com/indicators/russia_crude_oil_production https://ycharts.com/indicators/russia_crude_oil_production USA has increased production 54% since the beginning of 2016. https://www.macrotrends.net/2562/us-crude-oil-production-historical-chart https://www.macrotrends.net/2562/us-crude-oil-production-his... I'd investigate what you're reading that gave you the impression that Russia and SA increased production drastically in order to tank USA. It's likely the sources are providing misinformation.
- simonh 6y ago
  The disagreement between Saudi (representing OPEC) and Russia which lead them to increase production was just a few months ago, so you won’t see it’s consequences in oil production numbers for the last few years. It was widely reported in the media. https://en.m.wikipedia.org/wiki/2020_Russia–Saudi_Arabia_oil_price_war https://en.m.wikipedia.org/wiki/2020_Russia–Saudi_Arabia_oil...
  - rckoepke 6y ago
    > which lead them to increase production was just a few months ago https://www.eia.gov/opendata/qb.php?category=1039874&sdid=STEO.COPR_SA.M https://www.eia.gov/opendata/qb.php?category=1039874&sdid=ST... Production for the month of March is published and does not show a significant increase. Again, its likely that the sources you follow are providing misinformation - not just about this, but about other things as well. More generally, I follow oil news quite closely (as I work in the sector, and I have worked in Saudi Arabia specifically). These types of claims are "widely report in the media" constantly every year, although it is interesting that there's a Wikipedia page about this year's events. I personally wouldn't trust that version of events, as it only narrates changes in price without addressing movements of the supply/demand curve. I consider volumes of supply and demand to be more narrative for fungible commodities than statements of price alone. As all these price movements happened after China's enormous quarantine and reduction in road traffic in February, I'd posit that the falling prices are a result of concrete reduced demand, rather than hand-wavey price adjustments. Saudi can't adjust price lower globally single-handedly, the next marginal sales will happen at the market price. This wikipedia article doesn't seem to see that. The only way Saudi can reduce the price for its competitors is by supplying more oil to the global market.
    - simonh 6y ago
      Certainly recent price movements have mainly been driven by a dramatic fall in demand, but price drops in late March were also partly driven by Saudi announcements of production increases following they and Russia announced the breakdown of talks. https://www.wsj.com/articles/oil-price-war-batters-poorer-opec-members-as-coronavirus-looms-11585647001?mod=article_inline https://www.wsj.com/articles/oil-price-war-batters-poorer-op... This is all so recent that it’s entirely possible they have reversed course already, absolutely. However this isn’t some wacko conspiracy theory, it’s based on the explicit statements of these countries governments all over the mainstream media.

rckoepke 6y ago

I don't see this. Saudi Arabia has been producing around 10.5 million barrels per day fairly consistently-ish for the last 5 years. If anything it's a bit lower over the past 12 months vs the 60 month average: https://ycharts.com/indicators/saudi_arabia_crude_oil_production https://ycharts.com/indicators/saudi_arabia_crude_oil_produc... So that theory is right out, imo. Russia has increased production only 7-8% in the last 5 years. https://ycharts.com/indicators/russia_crude_oil_production https://ycharts.com/indicators/russia_crude_oil_production USA has increased production 54% since the beginning of 2016. https://www.macrotrends.net/2562/us-crude-oil-production-historical-chart https://www.macrotrends.net/2562/us-crude-oil-production-his... I'd investigate what you're reading that gave you the impression that Russia and SA increased production drastically in order to tank USA. It's likely the sources are providing misinformation.

simonh 6y ago
The disagreement between Saudi (representing OPEC) and Russia which lead them to increase production was just a few months ago, so you won’t see it’s consequences in oil production numbers for the last few years. It was widely reported in the media. https://en.m.wikipedia.org/wiki/2020_Russia–Saudi_Arabia_oil_price_war https://en.m.wikipedia.org/wiki/2020_Russia–Saudi_Arabia_oil...
- rckoepke 6y ago
  > which lead them to increase production was just a few months ago https://www.eia.gov/opendata/qb.php?category=1039874&sdid=STEO.COPR_SA.M https://www.eia.gov/opendata/qb.php?category=1039874&sdid=ST... Production for the month of March is published and does not show a significant increase. Again, its likely that the sources you follow are providing misinformation - not just about this, but about other things as well. More generally, I follow oil news quite closely (as I work in the sector, and I have worked in Saudi Arabia specifically). These types of claims are "widely report in the media" constantly every year, although it is interesting that there's a Wikipedia page about this year's events. I personally wouldn't trust that version of events, as it only narrates changes in price without addressing movements of the supply/demand curve. I consider volumes of supply and demand to be more narrative for fungible commodities than statements of price alone. As all these price movements happened after China's enormous quarantine and reduction in road traffic in February, I'd posit that the falling prices are a result of concrete reduced demand, rather than hand-wavey price adjustments. Saudi can't adjust price lower globally single-handedly, the next marginal sales will happen at the market price. This wikipedia article doesn't seem to see that. The only way Saudi can reduce the price for its competitors is by supplying more oil to the global market.
  - simonh 6y ago
    Certainly recent price movements have mainly been driven by a dramatic fall in demand, but price drops in late March were also partly driven by Saudi announcements of production increases following they and Russia announced the breakdown of talks. https://www.wsj.com/articles/oil-price-war-batters-poorer-opec-members-as-coronavirus-looms-11585647001?mod=article_inline https://www.wsj.com/articles/oil-price-war-batters-poorer-op... This is all so recent that it’s entirely possible they have reversed course already, absolutely. However this isn’t some wacko conspiracy theory, it’s based on the explicit statements of these countries governments all over the mainstream media.