{"id":17667,"date":"2016-02-11T14:32:18","date_gmt":"2016-02-11T19:32:18","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17667"},"modified":"2016-02-11T14:33:44","modified_gmt":"2016-02-11T19:33:44","slug":"opec-will-not-blink-first","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17667","title":{"rendered":"OPEC Will Not Blink First"},"content":{"rendered":"<h3><a href=\"http:\/\/oilprice.com\/Energy\/Crude-Oil\/OPEC-Will-Not-Blink-First.html\" target=\"_blank\">OPEC Will Not Blink First<\/a><\/h3>\n<p>An OPEC production cut is unlikely until U.S. production declines by about another million barrels per day (mmbpd). OPEC won\u2019t cut because it would accomplish nothing beyond a short-term increase in price. Carefully placed comments by OPEC and Russian oil ministers about the possibility of production cuts achieve almost the same price increase as an actual cut.<\/p>\n<p>Bad News About The Oil Over-Supply from IEA and EIA<\/p>\n<p>The International Energy Agency (IEA) and U.S. Energy Information Administration (EIA) shook the markets yesterday with news that the world\u2019s over-supply of oil has gotten worse rather than better in recent months. IEA data shows that the global liquids over-supply increased in the 4th quarter of 2015 to 2.24 million barrels per day (mmbpd) from 1.62 mmbpd in the 3rd quarter (Figure 1).<\/p>\n<p><a class=\"lightbox\" href=\"https:\/\/oilprice.com\/images\/tinymce\/2016\/ArtOPECcutA.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/cdn.oilprice.com\/images\/tinymce\/2016\/Copy%20of%20ArtOPECcutA.jpg\" alt=\"\" width=\"451\" height=\"308\" \/><\/a><\/p>\n<p><strong>Figure 1.<\/strong>\u00a0IEA world liquids market balance (supply minus demand). Source: IEA and Labyrinth Consulting Services, Inc.<\/p>\n<p>(click image to enlarge)<\/p>\n<p>Supply increased 70,000 bpd and demand decreased 550,000 bpd for a net increase in over-supply of 620,000 bpd. The sharp decline in demand is perhaps the most troubling aspect of IEA\u2019s report. The agency forecasts tepid demand growth of only 1.17 mmbpd in 2016 compared with 1.61 mmbpd in 2015. The weak global economy is the culprit.<\/p>\n<p>EIA\u2019s monthly data showed the same trend. Over-supply in January increased to 2.01 mmbpd from 1.35 mmbpd in December, a 650,000 bpd net change (Figure 2). Supply fell by 370,000 bpd but consumption dropped by a stunning 1.02 mmbpd.<\/p>\n<p><a class=\"lightbox\" href=\"https:\/\/oilprice.com\/images\/tinymce\/2016\/ArtOPECcutB.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/cdn.oilprice.com\/images\/tinymce\/2016\/Copy%20of%20ArtOPECcutB.jpg\" alt=\"\" width=\"451\" height=\"308\" \/><\/a><\/p>\n<p><strong>Figure 2.<\/strong>\u00a0EIA world liquids market balance (supply minus consumption). Source: EIA and Labyrinth Consulting Services, Inc.<\/p>\n<p>(Click image to enlarge)<\/p>\n<p><strong>The January 2016 Oil Price Head-Fake<\/strong><\/p>\n<p>Recent\u00a0<a href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-01-28\/oil-extends-gain-from-three-week-high-as-russia-flags-opec-talks\">comments<\/a>\u00a0about a possible OPEC cut were largely responsible for the late January \u201chead-fake\u201d increase in oil prices (Figure 3). WTI futures increased 27 percent from $26.55 to $33.62 per barrel between January 20 and 29.<\/p>\n<p>..click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>OPEC Will Not Blink First An OPEC production cut is unlikely until U.S. production declines by about another million barrels per day (mmbpd). OPEC won\u2019t cut because it would accomplish nothing beyond a short-term increase in price. Carefully placed comments by OPEC and Russian oil ministers about the possibility of production cuts achieve almost the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[2434,251,267,416,433,588,595,596,5332,600,694],"class_list":["post-17667","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-arthur-berman","tag-eia","tag-energy-information-administration","tag-iea","tag-international-energy-agency","tag-oil","tag-oil-production","tag-oil-supply","tag-oilprice-com","tag-opec","tag-russia"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17667"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17667\/revisions"}],"predecessor-version":[{"id":17668,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17667\/revisions\/17668"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}