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    Thread: Drone strike forces Saudis to cut production IN HALF - Pepper you Angus

    1. Chili Bigot Seabird's Avatar
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      09-14-2019 02:16 PM #1
      https://www.wsj.com/articles/drone-s...d=hp_lead_pos1

      Quote Originally Posted by WSJ
      A coordinated drone strike hit at the heart of Saudi oil production on Saturday, sparking an enormous blaze and forcing the kingdom to shut down about half of its crude output, according to people familiar with matter. Iran-alled Houthi rebels in neighboring Yemen claimed responsibility for what would be one of their largest-ever attacks inside the kingdom.
      The Saudi production shutdown amounts to a loss of about five million barrels a day, the people said, roughly 5% of the world’s daily production of crude oil. The kingdom produces 9.8 million barrels a day.
      This has the potential to be significant. These sorts of actions by non-state players limit the Saudis’ ability to respond. The US’, too. Traders will likely consider this an ongoing and persistent risk and apply it as a cost to the overall price of oil going forward. The more common and successful these attacks, the more expensive it’s going to get.

      I’ll go one step further by saying that if oil prices spike and remain high for more than a couple of months, it will be the tipping point for the recession that everyone is so worried about.
      Quote Originally Posted by Col. David Crockett
      I told the people of my district, that, if they saw fit to re-elect me, I would serve them as faithfully as I had done; but, if not, they might go to Hell, and I would go to Texas.

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    3. Member Meroving1an's Avatar
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      09-14-2019 02:21 PM #2
      I say without any political bias whatsoever: gasoline prices aren't going to spike up consistently under Trump's watch.

    4. I need new ones NeverEnoughCars's Avatar
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      09-14-2019 02:21 PM #3
      Time to buy an EV!
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    5. Chili Bigot Seabird's Avatar
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      09-14-2019 02:28 PM #4
      Quote Originally Posted by Meroving1an View Post
      I say without any political bias whatsoever: gasoline prices aren't going to spike up consistently under Trump's watch.
      I have been working within different areas of the energy industry for almost 20 years. Perhaps I lack the imagination, but I don’t know what he could do to materially stop that boulder once it gets moving downhill.
      Quote Originally Posted by Col. David Crockett
      I told the people of my district, that, if they saw fit to re-elect me, I would serve them as faithfully as I had done; but, if not, they might go to Hell, and I would go to Texas.

    6. Member Dawg Dee-Lux's Avatar
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      09-14-2019 02:31 PM #5
      Quote Originally Posted by NeverEnoughCars View Post
      Time to buy an EV!
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    7. Member Meroving1an's Avatar
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      09-14-2019 02:38 PM #6
      Quote Originally Posted by Seabird View Post
      I have been working within different areas of the energy industry for almost 20 years. Perhaps I lack the imagination, but I don’t know what he could do to materially stop that boulder once it gets moving downhill.
      That's good to know.

      I feel like Trump will see high gasoline prices - like a tanking stock market would also - as a threat to his reelection so he's going to make some absurd move that no one rational would think he'd make (more drilling! release the strategic reserves!)

      Again, without political bias, just based on the trends of his presidency.

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      09-14-2019 02:40 PM #7
      The things KSA did and is still doing in Yemen.... not surprised at all

      There's a lot more cushion in the oil market than there was 10 years ago though. I know all the pro EV people are hoping for any kind of gas-related economic pain to push forward the EVijad prophecy but I don't think this is gonna be it.

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      09-14-2019 02:44 PM #8
      Quote Originally Posted by Seabird View Post
      I don’t know what he could do to materially stop that boulder once it gets moving downhill.
      Ease the sanctions against Iran.

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      09-14-2019 03:12 PM #9
      Quote Originally Posted by CTK View Post
      The things KSA did and is still doing in Yemen.... not surprised at all

      There's a lot more cushion in the oil market than there was 10 years ago though. I know all the pro EV people are hoping for any kind of gas-related economic pain to push forward the EVijad prophecy but I don't think this is gonna be it.

      The Permian Basin in West Texas alone will help soften the blow...it's booming like nobody's business out there right now and will continue for a several years. Texas in general, especially the southern half will be recession proof for at least another two years. There is so much infrastructure coming in right now setting us up for major oil exportation, along with a new steel plant and plastics plant in my area.

      Here's a good article on West Texas crude:

      https://time.com/5492648/permian-oil-boom-west-texas/
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    11. 09-14-2019 04:44 PM #10
      There's no overall shortage of oil and other suppliers will compensate for the shortfall. Saudi Arabia itself has other outlet options to open too.

    12. Chili Bigot Seabird's Avatar
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      09-14-2019 04:50 PM #11
      Quote Originally Posted by Senior Member View Post
      Ease the sanctions against Iran.
      Mmm... That would be a short term affect. My point originally is that this drone strike has highlighted a very weak link in the overall supply chain. Even if the war in Yemen were to end tomorrow, it doesn’t change the fact that the security paradigm has shifted for ALL producers.

      And the Permian plays don’t NOT insulate us from any sort of risk. How unlikely do you think it would be for a terror cell to infiltrate Mexico and launch drone strikes into West Texas?

      This sort of attack is going to be considered a permanent risk going forward, regardless of who is producing what, or where.
      Quote Originally Posted by Col. David Crockett
      I told the people of my district, that, if they saw fit to re-elect me, I would serve them as faithfully as I had done; but, if not, they might go to Hell, and I would go to Texas.

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      09-14-2019 05:26 PM #12
      Quote Originally Posted by Meroving1an View Post
      I say without any political bias whatsoever: gasoline prices aren't going to spike up consistently under Trump's watch.
      depends. oil is geopolitical what it comes down to is more drone attacks or what they'll do to quell it.

      sauds will be back online in a few days and will release reserves most likely, futures market tmw will be interesting... how that impacts rbob, who knows. Motiva Enterprises has a 600k b/pd oil refinery in the us, could cause a hiccup as well.

      fwiw, 260.2 billion barrels of oil equivalent in reserves, think they'll be ok.

      we import 9% from saudi https://www.eia.gov/tools/faqs/faq.php?id=727&t=6

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      09-14-2019 05:29 PM #13
      Quote Originally Posted by Senior Member View Post
      Ease the sanctions against Iran.
      Who sponsor the Houthi rebels, who are linked to the attack.

      And I’m not sure shale is going to save us. Shale rig counts have been declining steadily for the last few months because Wall St. had been turning off the cash spigot for new drilling. High prices can turn that around, but it’s like turning a battleship around- takes time- and shale companies would need to be convinced prices will stay elevated.

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      09-14-2019 06:34 PM #14
      Who cares, we all know the world is controlled by lizard people who live below DIA Airport

    16. Member SoSuMi's Avatar
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      09-14-2019 06:35 PM #15
      Quote Originally Posted by rich! View Post
      ...sauds will be back online in a few days and will release reserves most likely, futures market tmw will be interesting... how that impacts rbob, who knows. Motiva Enterprises has a 600k b/pd oil refinery in the us, could cause a hiccup as well.

      fwiw, 260.2 billion barrels of oil equivalent in reserves, think they'll be ok.

      we import 9% from saudi https://www.eia.gov/tools/faqs/faq.php?id=727&t=6
      You think they will get that 5 million barrels back online in a few days?... Maybe they will (I certainly don't know) but those fires appear to be serious. Putting them out and getting stuff up and running in a few days seems questionable. For a long time I've believed that someone was likely to hit the Saudis where it hurts (Iran via proxies) and if the Saudis see this as an existential threat, they may take a direct swing at Iran. That could shut the straights down and ruin the party for everyone.

      We've been blowing crap up and killing people (hopefully "mostly" terrorists) in Yemen via drones since 2002. And in Iraq, Syria, Afghanistan, Libya, Somalia, Pakistan and central Africa. Business is "booming" for the drone manufactures.
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    17. 09-14-2019 06:38 PM #16
      Quote Originally Posted by Burnette View Post
      There's no overall shortage of oil and other suppliers will compensate for the shortfall. Saudi Arabia itself has other outlet options to open too.
      This.

      Another nothingburger.

    18. Geriatric Member spockcat's Avatar
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      09-14-2019 07:07 PM #17
      Maybe it was actually a US drone.

      Global spare oil capacity in U.S. hands after Saudi outage

      LONDON (Reuters) - An attack on Saudi oil facilities on Saturday is believed to have disrupted half the country’s production capacity, making the United States the only real holder of the global supply cushion via its ability to raise own output or to soften sanctions against other major oil producers.

      Saudi Arabia has yet to comment on the extent of damage on its oil production but industry sources have said some 5-6 million barrels per day (bpd) or 5-6% of global supply have been affected.

      Saudi Arabia, the Organization of the Petroleum Exporting Countries’ de-facto leader and largest producer, has been long seen as the custodian of the world’s spare oil capacity.

      Spare capacity is the extra oil a producing country can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage.

      Industry sources have said Saudi Arabia will be able to restore supply within days. A prolonged supply outage will have a major bullish impact on oil prices, which in turn will spur further gains in U.S. shale production.

      The United States has briefly overtaken Saudi Arabia as the world largest crude exporter this year, only a few years after removing a ban on oil exports because of large needs at home as the world’s largest oil consumer.

      Analysts have repeatedly underestimated U.S. output growth gains with the country now producing around 15% of global supply.

      Besides the United States, the only countries which have significant spare capacity are Iran and Venezuela.

      Both are subject to U.S. sanctions and have seen their exports reduced to a trickle over the past year as U.S. President Donald Trump has tightened sanctions.

      Iran has seen its exports falling by over 2 million bpd since the sanctions have been imposed and Venezuela have seen its exports plummeting too.

    19. 09-14-2019 07:33 PM #18
      That's not an absurd theory Spockcat. Wars are started over less

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      09-14-2019 07:53 PM #19
      I've never understood the idea of that the USA is an oil exporter. Sure they export some oil to foreign refineries, but they import way more oil. I thought the rough USA oil balance sheet is that you consume 20Mbpd and produce around 11Mbdp? The only way I can think to get those numbers to work out is that the demand of 20Mbpd is the demand at the refinery gate and much of what is refined in the US is exported as finished product.

      It'll be interesting to see where oil goes after this, I've heard estimates that prices could spike to $100 per barrel! I can't imagine it will last long though, I doubt the economy could take that as it seems like things are weak even before an oil price spike. Perhaps the fed will cave to Trump and drop interest rates to zero and fire up the printing presses again if they think an oil price spike could tip the economy over into recession.

      Also, personally, don't have much sympathy for the House of Saud.

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      09-14-2019 08:03 PM #20
      When I read this news, the first thing that popped into my head was Mad Max: protected oil refineries and escorted tankers. I don’t think we are far away from these things...just a matter of time.

    22. Chili Bigot Seabird's Avatar
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      09-14-2019 08:08 PM #21
      Quote Originally Posted by Dirtmvr View Post
      When I read this news, the first thing that popped into my head was Mad Max: protected oil refineries and escorted tankers. I don’t think we are far away from these things...just a matter of time.
      You’re the first person who gets the point I was trying to make.
      Quote Originally Posted by Col. David Crockett
      I told the people of my district, that, if they saw fit to re-elect me, I would serve them as faithfully as I had done; but, if not, they might go to Hell, and I would go to Texas.

    23. 09-14-2019 08:48 PM #22
      The attack will cause an initial disruption but again, keep it in perspective, the amount in reserves and the nations still pumping can and will make up for the loss.

      In a statement carried by the Saudi Press Agency (SPA), Prince Abdulaziz said the attacks "resulted in a temporary suspension of production at Abqaiq and Khurais plants".

      The Khurais oilfield produces about 1% of the world's oil, and Abqaiq is the company's largest facility - with the capacity to process 7% of the global supply.

      He said that part of the reduction would be compensated for by drawing on Aramco's oil stocks.
      The situation was under control at both facilities, Aramco CEO Amin Nasser said, adding that no casualties had been reported in the attacks."



      https://www.bbc.com/news/world-middle-east-49703143
      Last edited by Burnette; 09-14-2019 at 08:58 PM.

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      09-14-2019 09:23 PM #23
      Surely fuel prices will go up.
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      09-14-2019 09:41 PM #24
      I was coming in here to post the same thing with the same title.

      Both trucks are getting filled up today.

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      09-14-2019 10:24 PM #25
      Quote Originally Posted by Seabird View Post
      And the Permian plays don’t NOT insulate us from any sort of risk. How unlikely do you think it would be for a terror cell to infiltrate Mexico and launch drone strikes into West Texas?
      Really, really, really, really, really, really unlikely. That would basically be WW3. KSA has no problem blowing **** up, yet they haven't sent a follow up squad after 9/11 to protect their interests. The Yemen/Saudi thing runs very deep; it's a proxy war between KSA/Iran and Persians/Arabs in general that goes back thousands of years.

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