{"id":44005,"date":"2017-09-21T09:37:49","date_gmt":"2017-09-21T13:37:49","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=44005"},"modified":"2017-09-21T09:37:49","modified_gmt":"2017-09-21T13:37:49","slug":"oil-price-band-saudis-want","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/","title":{"rendered":"What Oil Price Band Do The Saudis Want?"},"content":{"rendered":"<p style=\"margin: 0 0;\"><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/7551.jpg\" alt=\"Robert Boslego - INO.com Contributor - Energies\" width=\"350\" height=\"131\" class=\"alignleft size-full wp-image-30488\" style=\"padding-top: 10px;\" \/><\/p>\n<p style=\"margin: 0 0;\"><br style=\"clear:both;\"><\/p>\n<p>Back in December, I deduced that the Saudis had budgeted a little less than $53 for oil in 2017. Their budget was based on their belief that they didn't expect to see any U.S. shale oil production response in 2017. Saudi Energy Minister Khalid A. Al-Falih said it in answer to a question in the press conference after the OPEC\/non-OPEC meeting (see <strong><a href=\"http:\/\/www.opec.org\/opec_web\/en\/multimedia\/videoDetail.htm\" target=\"_blank\">video<\/a><\/strong> starting at 51:35). He backed-up his belief basing it on the time lag of when oil prices had peaked in 2014 and when production peaked in 2015.<\/p>\n<p>After the deals went into effect on January 1st, oil prices remained above $50 per barrel. According to the EIA\u2019s weekly production data, U.S. crude production rose by 318,000 b\/d between the last week of December and the week ending March 3rd, just before Al-Fahil\u2019s speech in Houston during on March 7th.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/8960.jpg\" width=\"514\" height=\"289\" alt=\"U.S. Crude Production \" class=\"aligncenter size-full\" \/><\/p>\n<p>He said he is optimistic about the global oil market in the weeks and months ahead, but \"I caution that my optimism should not tip investors into 'irrational exuberance' or wishful thinking that OPEC or the Kingdom will underwrite the investments of others at our own expense.\"<!--more--><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/8961.jpg\" width=\"640\" height=\"360\" alt=\"Khalid al-Falih\" class=\"aligncenter size-full\" \/><br \/>\n<small><em>Khalid al-Falih: 'I am optimistic about the global market outlook in the weeks and months ahead' \u00a9 Bloomberg<\/em><\/small><\/p>\n<p>His <strong><a href=\"http:\/\/in.reuters.com\/article\/ceraweek-saudi-speech\/update-1-full-text-ceraweek-saudi-energy-minister-khalid-al-falihs-speech-idINL2N1GK132\" target=\"_blank\">speech<\/a><\/strong> was most notable for the following quote:<\/p>\n<blockquote><p>\"Saudi Arabia will not allow itself to be used by others. My colleagues have heard that privately, and I am saying it publicly. This is for the benefit of all and needs to be achieved by the contributions of all,\" he said. \"But this time around, we made it clear that we will not bear the burden of 'free rides,' and both groups are reinforcing one another through voluntary management of their production.\"<\/p><\/blockquote>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/8962.jpg\" width=\"800\" height=\"452\" alt=\"WTI Crude Oil Prices\" class=\"aligncenter size-full\" \/><\/p>\n<p>Futures prices quickly collapsed below $50 per barrel.  Long speculators, who had built record-high positions in February, had already started to liquidate, raced out of the trade.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/8963.jpg\" width=\"797\" height=\"447\" alt=\"Spec Longs Crude Oil\" class=\"aligncenter size-full\" \/><\/p>\n<p>According to the EIA, U.S. crude production had risen by another 232,000  b\/d between March 3rd and May 19th to 9.320 million barrels per day since oil prices had spent time north of $50\/b.   After dropping again, oil prices recovered during May as the semi-annual OPEC meeting was drawing near. Prices topped $51\/b just before the May 25th meeting.<\/p>\n<p>At the meeting, OPEC announced it would extend the deals for nine more months ending March 2018.  Prices collapsed again because there was no announcement of a further cut.<\/p>\n<p>Throughout the summer, oil prices remained below $50, except for a one-day close (July 31st) at $50\/b. During July, the Baker-Hughes oil-directed rig count broke from its linear trend.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"\/img\/sites\/ino\/email\/8964.jpg\" width=\"755\" height=\"452\" alt=\"Oil Rig Counts \" class=\"aligncenter size-full\" \/><\/p>\n<p>Since it is the most appropriate leading indicator for future U.S. oil production, it is implying that prices below $50\/b are not high enough to incentivize growth in crude production. Also, U.S. crude production had only increased by 33,000 b\/d between the weeks ending May 19th and September 8th.<\/p>\n<h2 style=\"color: #003380; font-size: 17px;\">Conclusions<\/h2>\n<p>The OPEC market monitoring committee is scheduled to meet this Friday, and the question is, what sort of signal does OPEC want to send the market? Based on the facts above, I believe they will conclude that they do not want oil prices above $50 at this time to restrain U.S. crude production growth.  Saudi Arabian Energy Minister Khalid al-Falih, who traveled to similar meetings earlier this year, might not attend Friday\u2019s gathering, a <strong><a href=\"https:\/\/www.reuters.com\/article\/us-opec-meeting\/nigeria-libya-likely-to-attend-opec-led-panel-saudi-may-not-sources-idUSKCN1BU1QT\" target=\"_blank\">source said<\/a><\/strong>. That confirms my belief that he does not want to encourage prices in the $50s.<\/p>\n<p>Check back to see my next post!<\/p>\n<p>Best,<br \/>\n<a href=\"http:\/\/www.ino.com\/blog\/meet-ino-com-contributor-robert-boslego\/\" target=\"_blank\">Robert Boslego<\/a><br \/>\nINO.com Contributor - Energies<\/p>\n<p><span style=\"font-size: 12px; font-style: italic;\">Disclosure: This contributor does not own any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Back in December, I deduced that the Saudis had budgeted a little less than $53 for oil in 2017. Their budget was based on their belief that they didn't expect to see any U.S. shale oil production response in 2017. Saudi Energy Minister Khalid A. Al-Falih said it in answer to a question in the [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":27,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[28,7773,8164,8920,9106,9105,7690,8457,8543,8401,8911],"class_list":["post-44005","post","type-post","status-publish","format-standard","hentry","category-ino-com-contributors","tag-crude-oil","tag-crude-oil-prices","tag-global-oil-demand","tag-global-oil-inventories","tag-global-oil-market","tag-opec-meeting","tag-rig-counts","tag-robert-boslego","tag-saudi-energy-minister-khalid-al-falih","tag-the-organization-of-the-petroleum-exporting-countries-opec","tag-wti-crude-oil"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"description\" content=\"What sort of signal does OPEC want to send the crude oil market?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog\" \/>\n<meta property=\"og:description\" content=\"What sort of signal does OPEC want to send the crude oil market?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\" \/>\n<meta property=\"og:site_name\" content=\"INO.com Trader&#039;s Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/inocom\/\" \/>\n<meta property=\"article:published_time\" content=\"2017-09-21T13:37:49+00:00\" \/>\n<meta name=\"author\" content=\"Robert Boslego\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Robert Boslego\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\"},\"author\":{\"name\":\"Robert Boslego\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/c15c56516567b575ba78ad3a3579bbcc\"},\"headline\":\"What Oil Price Band Do The Saudis Want?\",\"datePublished\":\"2017-09-21T13:37:49+00:00\",\"dateModified\":\"2017-09-21T13:37:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\"},\"wordCount\":650,\"commentCount\":3,\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"keywords\":[\"Crude Oil\",\"Crude Oil Prices\",\"Global Oil Demand\",\"Global Oil Inventories\",\"Global Oil Market\",\"OPEC meeting\",\"Rig Counts\",\"Robert Boslego\",\"Saudi Energy Minister Khalid Al-Falih\",\"The Organization of the Petroleum Exporting Countries (OPEC)\",\"WTI Crude Oil\"],\"articleSection\":[\"INO.com Contributors\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\",\"url\":\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\",\"name\":\"What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#website\"},\"datePublished\":\"2017-09-21T13:37:49+00:00\",\"dateModified\":\"2017-09-21T13:37:49+00:00\",\"description\":\"What sort of signal does OPEC want to send the crude oil market?\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.ino.com\/blog\/#website\",\"url\":\"https:\/\/www.ino.com\/blog\/\",\"name\":\"INO.com Trader&#039;s Blog\",\"description\":\"Expert Charts, Trading Tips and Technical Analysis from INO.com\",\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.ino.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\",\"name\":\"INO.com Trader&#039;s Blog\",\"url\":\"https:\/\/www.ino.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg\",\"contentUrl\":\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg\",\"width\":400,\"height\":472,\"caption\":\"INO.com Trader&#039;s Blog\"},\"image\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/inocom\/\",\"https:\/\/www.linkedin.com\/company-beta\/1056449\/\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/c15c56516567b575ba78ad3a3579bbcc\",\"name\":\"Robert Boslego\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/0f5a2df8d362069edd329a54dfe6be39?s=96&d=identicon&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/0f5a2df8d362069edd329a54dfe6be39?s=96&d=identicon&r=pg\",\"caption\":\"Robert Boslego\"},\"url\":\"https:\/\/wwwtest.ino.com\/blog\/author\/robert-boslego\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog","description":"What sort of signal does OPEC want to send the crude oil market?","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/","og_locale":"en_US","og_type":"article","og_title":"What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog","og_description":"What sort of signal does OPEC want to send the crude oil market?","og_url":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/","og_site_name":"INO.com Trader&#039;s Blog","article_publisher":"https:\/\/www.facebook.com\/inocom\/","article_published_time":"2017-09-21T13:37:49+00:00","author":"Robert Boslego","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Robert Boslego","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/#article","isPartOf":{"@id":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/"},"author":{"name":"Robert Boslego","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/c15c56516567b575ba78ad3a3579bbcc"},"headline":"What Oil Price Band Do The Saudis Want?","datePublished":"2017-09-21T13:37:49+00:00","dateModified":"2017-09-21T13:37:49+00:00","mainEntityOfPage":{"@id":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/"},"wordCount":650,"commentCount":3,"publisher":{"@id":"https:\/\/www.ino.com\/blog\/#organization"},"keywords":["Crude Oil","Crude Oil Prices","Global Oil Demand","Global Oil Inventories","Global Oil Market","OPEC meeting","Rig Counts","Robert Boslego","Saudi Energy Minister Khalid Al-Falih","The Organization of the Petroleum Exporting Countries (OPEC)","WTI Crude Oil"],"articleSection":["INO.com Contributors"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/","url":"https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/","name":"What Oil Price Band Do The Saudis Want? - INO.com Trader&#039;s Blog","isPartOf":{"@id":"https:\/\/www.ino.com\/blog\/#website"},"datePublished":"2017-09-21T13:37:49+00:00","dateModified":"2017-09-21T13:37:49+00:00","description":"What sort of signal does OPEC want to send the crude oil market?","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.ino.com\/blog\/2017\/09\/oil-price-band-saudis-want\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.ino.com\/blog\/#website","url":"https:\/\/www.ino.com\/blog\/","name":"INO.com Trader&#039;s Blog","description":"Expert Charts, Trading Tips and Technical Analysis from INO.com","publisher":{"@id":"https:\/\/www.ino.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.ino.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.ino.com\/blog\/#organization","name":"INO.com Trader&#039;s Blog","url":"https:\/\/www.ino.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg","contentUrl":"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg","width":400,"height":472,"caption":"INO.com Trader&#039;s Blog"},"image":{"@id":"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/inocom\/","https:\/\/www.linkedin.com\/company-beta\/1056449\/"]},{"@type":"Person","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/c15c56516567b575ba78ad3a3579bbcc","name":"Robert Boslego","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/0f5a2df8d362069edd329a54dfe6be39?s=96&d=identicon&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/0f5a2df8d362069edd329a54dfe6be39?s=96&d=identicon&r=pg","caption":"Robert Boslego"},"url":"https:\/\/wwwtest.ino.com\/blog\/author\/robert-boslego\/"}]}},"_links":{"self":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts\/44005"}],"collection":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/comments?post=44005"}],"version-history":[{"count":0,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts\/44005\/revisions"}],"wp:attachment":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/media?parent=44005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/categories?post=44005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/tags?post=44005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}