Analysis by the father of American Geopolitics Dr. Daniel Fine, MIT.

Posts tagged ‘Saudi Aramco’

Oil guru Fine was right on gas prices


The full article can be found here–> http://rdrnews.com/wordpress/blog/2015/11/28/oil-guru-fine-was-right-on-gas-prices/

Energy expert Dr. Daniel Fine, left, in March predicted the current low gasoline prices. Pictured with Fine during a meeting in Roswell in March are local oil men Rory McMinn of Reed & Stevens, center, and Bob Armstrong of Armstrong Energy Corp. (Jeff Tucker Photo)

An energy expert’s prediction in March that gasoline prices in New Mexico would dip to $1.65 a gallon has been proven true.
Dr. Daniel Fine, associate director of the New Mexico Center for Energy Policy at New Mexico Institute of Mining and Technology, said at a landmen’s association’s meeting in Roswell in March that gasoline prices in New Mexico would drop to as low as $1.60 a gallon this year as the United States and the Organization of Petroleum Exporting Countries engage in a crude oil price war.
Gasoline prices in Bernalillo County dipped to $1.64 a gallon this week at some stations, according to GasBuddy.com. Gasoline prices in Chaves County were as low as $1.80 a gallon this week at Sam’s Club in Roswell.
In March, Fine predicted gasoline prices in the Albuquerque market in 2015 would rise slightly to $2.35 a gallon before leveling off somewhere between $2.35 and $1.65 per gallon. He said in March that gasoline prices in Albuquerque could ultimately drop to as low as $1.60 a gallon.
“We made it to $1.60 and I have an outline of where we’ll be in 2016,” Fine told the Daily Record this week. “I’m getting calls to return to Roswell to do the next year.”
Fine said fuel prices in the United States are at their lowest levels since 1998, unadjusted for inflation. Fine attributed the low gasoline prices to soft market demand and excess supplies of crude oil.
The United States has more crude oil reserves than it has had since 1933, Fine said.
Fine said he’s not so sure crude oil prices will rise any time soon. He said there is a lot of anticipation about a Dec. 4 meeting of OPEC in Vienna, Austria.
“There’s a little excitement in the market about what the Saudi Arabian position might be on the 4th,” Fine said. “What’s reported out is some language about stability. So the speculators are buying oil today. But I am very skeptical that this will last.”
Fine, who has been critical of OPEC, said the oil cartel is creating an imbalance in the marketplace by over-producing while crude prices continue to drop.
Fine said many economists assumed Saudi Arabia’s state-owned oil producers would cut back production as crude oil prices plummeted, but he said that did no occur.
“From Thanksgiving (2014) on, we’re in this oil price war crisis,” Fine said.

Column: Geopolitical events demand rapid response from unconventional producers by oil and gas expert Dr. Daniel Fine -Special to the Daily-Times-


For the complete article by Dr. Daniel Fine use this link-> http://www.daily-times.com/four_corners-news/ci_28389990/column-geopolitical-events-demand-rapid-response-from-unconventional?source=most_viewed

The Saudi-OPEC price war is now nine months old. Two OPEC meetings have passed without revisions or changes in strategy. It is a war against high-cost unconventional American producers that are seen as the principal threat to market share.

The West Texas Intermediate price per barrel has recovered since the low of the mid-$40 bottom to slightly above $60. This has become a trading range with algorithms following momentum making a price range. Financial or paper traders and speculators have moved the price of oil in a “rally” up $15.

Oversupply still overshadows the market. The balance of supply and demand awaits the onset of winter or 2016. The market share for OPEC and Saudi Arabia continues to expand at the expense of non-OPEC producers, but American shale or unconventional production has not declined to the point that an acceptable world balance between supply and demand appears to be in the making.

Daniel Fine

Daniel Fine (Daily Times file photo)

The CEO of Conoco Phillips was invited to the recent preliminary OPEC meeting and he challenged the producer countries with a warning: American “high cost” production will survive the price war with cost-saving efficiency already in process and yet to come. This promises American oil supply at less cost and a prospect of little change in world supply while demand remains weak and possibly weaker with China importing less crude as well as iron ore and other commodities.

What is now at play in oil price formation is geopolitics.

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