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OPEC's 900 billion dollar blunder..??
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JonSCKs
Posted 8/26/2015 00:15 (#4753558)
Subject: OPEC's 900 billion dollar blunder..??


The latest stats have OPEC production around 36.6 myn bbls per day.. 

They could easily cut back just 10% and probably double world crude prices..

( http://oilprice.com/Energy/Oil-Prices/OPECs-900-Billion-Mistake.htm... )

By Euan Mearns
Posted on Mon, 24 August 2015 19:59 

With WTI falling below $40 and perhaps heading for $20, one needs to wonder if OPEC’s strategy is working out as planned? Why are they following this course and what are their goals? The face value explanation, accepted by many, is that OPEC is protecting market share especially against rampant supply growth in the OECD, namely in the US LTO (light tight oil) patch. This post examines how OPEC’s market share has evolved with time and with past swings in the oil price

.( see article )..

Finally, a concluding thought. Had OPEC defended price as opposed to share they may have seen production fall by 5 M bpd and a price close to $100 maintained. The current course of defending 36 M bpd may take the oil price down to $20.

32 M bpd @ $100 is worth $1168 billion per year

36 M bpd @ $20 is worth $263 billion per year

The difference of $905 billion per year could make this one of the costliest blunders of all time.

NotionalValueOfOPECProduction

Figure 5 The notional value of OPEC production calculated by multiplying daily production by price by 365.

All data from the 2015 BP Statistical Review.

By Euan Mearns 



Edited by JonSCKs 8/26/2015 00:19
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