FOR TEN YEARS THE WAR IS ON FOR MARKET SHARE:
Oil Crack Spread – know what THAT means?
The war for customers is complicated. It has more to do with the OIL CRACK SPREAD then the price of oil in the daily insane spot markets so influenced by speculation.
The proposed 1.3 to 1.5 million barrels a day cut – comes against a 3 million a day run up of extra pumping supply capacity – from OPEC producers. So if you had a glut before the 3 million – you ran the 3 million up so the cuts would be symbolic – as the peak part of production was only since summer and window dressing to get a CUT NUMBER that would not affect your net revenue in Saudi, Iran, Iraq, Russia or any Opec supportive member. Most will cheat anyway to get more money. As they cheat there won’t be any cut back at all its just a joke really. When prices fall they will have to make up the failed price boast attempt the only way a nation can – by selling more. But without cheat, the cut is SYMBOLIC and does not diminish the sum totals reaching the market greater than the market can buy. Other producing non opec nations will grab MARKET SHARE by pumping into the market using OPEC as a decision – to steal their markets. A WAR FOR MARKET IS “GAME ON”. There is and will remain a glut. Further NORTH AMERICA is raising production to take MARKET SHARE from OPEC due to this move.
In fact, the buyers are now MOVING AWAY FROM OPEC in hours after their symbolic last gasp to be relevant in a market where they have no more influence outside price and demand modeling – economics not politics.
The buyers are seeking to match refining designed for one model of crude to producers who can deliver that model of crude to their refiners. The global supply chain is divided into an OIL CRACK SPREAD of specifications for CRUDE OIL that match refiner design plants globally . Producers want to align with buyer refiners in nations that match they’re output and take MARKET SHARE away from OPEC – there is a MARKET SHARE WAR that is a foundation to price – more important and influential than price – because market share is CORE TO PRICE.
Buyers want the crack spread match from the suppliers that match their needs – won’t cut back or change agreements, and will deliver longer term PRICE PROTECTED OIL. Saudi is forced to sell more and more in spot markets and avoids long term contracts that used to be its old economic model when it had control – now it does not have control and now not even influence.
The latest FREE MARKET TAMPERING trying to CONTROL FREE GLOBAL MARKETS is another one of the long failing OPEC policies. Such policies are short sighted. These policies are political, not economic. Economist warns against such modeling and tampering and the unintended consequences. Politicians are desperate. Their economics are in recession. They are desperate for cash. They priced debt and growth on one price for oil which crashed over 60% in 24 months. The UTTER COLLAPSE OF OIL MANIPULATED PRICES – CASINO MADNESS PRICING – is now being paid by the FREE MARKET rebalancing. This economic can not be undone by an increasingly isolated producer cartel that has to reform its own core participation into the markets to win. Failing such economic versus political reforms – the producer nations are going to experience volatility and declines in their GNP that have not been seen in decades.
The MARKET SHARE WAR the foundation to price is on in full. Nation buyers are globally moving away from OPEC starting this week – and moving into new supply lines that match their refining distribution needs at the best longer term protected lower prices outside OPEC. As there is a buyers market and supply will be greater than demand for years how would economically one fight this financial gravity?
OPEC has been ILL advised and has made a decision that will show OPEC is dead to the world – the market alreay knows OPEC is dead and buried. Oil prices driving market praices in a fools rally will rebalance soon. Trust me on that item.
Berny Dohrmann – Keeping a light on the price of EVERYTHING just for YOU— December 2, 2016