THIS WEEKEND RUSSIA LEADS THE OPEC PARADE
Oil edged down to 49.00 and the largest weekly CRASH in price in six weeks or almost two months. Opec is in a price war to keep price LOW to avoid North America taking their customer base. So far their strategy is NOT working.
North America reporting SOARING EXPORTS of oil products including refined gasoline to customers once OWNED by OPEC exclusively. As North AMERICA has more supply than OPEC and is less effected by GULF POLITICAL INSTABILITY – the long bet from customers is increasing with North America.
This and food products helped the USA reach a 3 % grow to upgrade this quarter soaring the GNP of the nation – trashing expert forecasting. IT IS ALL ABOUT OIL and the WORLD WIDE PRICE WAR.
Opec meets this with more monetary distress from more of its member and nonmember producer nations than anytime in its history. This means OPEC members will never agree to cut OUTPUT as all members are desperate for income the sale of oil products provides. A FREEZE at RECORD HIGH LEVELS OF OUTPUT is a “teaser” with no value to the market – in fact, it means once again OPEC IS DEAD as an agency of global influence on market price or supply and demand. OPEC Is not hostage to the markets versus in control OF the markets.
The new world order of oil economics IS that nothing has stopped North America output rising. Nothing. All policies have led to the glut. All policies have led to the failure to block North American supply gains.
Cutting back today by OPEC means North America out put can rise up to fill the output cut back. Iraq the second largest producer from Saudi wishes to be “excused’ from any OUT PUT Freeze or decline. Iran wants an exemption. Political riots in Venezuela and Libya block their output returning to normalized levels only temporarily.
Russia GNP has crashed 80% in sixty months. Desperate for cash Russia a PETRO STATE is unlikely to agree to any down turn in their income at a time they are desperate for income.
We see the USA financial gains this quarter as an “ONE OFF”. A GNP hype number stitched together on SOY BEAN sales, from a bumper crop. This bumper crop will not again bail out the USA and China has other markets to buy from. As relations with China go South with a NEW PRESIDENTIAL TEAM we see the GNP from the USA as a blip in the model with a 1.5% average to date year end 2016 GNP likely to remain the dismal number. With less than 5% growth the USA can NEVER PAY OFF ITS DEBT starting in the year 2020. Hence our concerns for the crises in leadership.
So we see OPEC in disarray. WE see members desperate for cash. We see no one living with any agreement.
We are watching with all hands on NOV 8th now only days away.
We’ll keep a prayer light on just for you.
Berny Dohrmann – Chairman CEO SPACE— October 29, 2016