@clinton: I'm struggling with the notion of trying to understand exactly what it is that we are forecasting. Are we to defer to what the local actors say? Is an S-300 missile, without other elements, an S-300 system, even if Dehghan says it is? Are we to accept OPEC saying the ceiling continues if simultaneously the delegates are not morally bound to any ceiling? Somewhere reality needs to take precedence.
@redacted. I would and did argue they were never morally bound to the number and that's why it was exceeded. Ultimately I have come to peace that the events transpired as I forecast. Due to the differing competing needs opec were unable to effect a change (up or down). I am not smart enough to foresee the assumed collapse of the system as you propose has occurred so there is no point me pretending i can do that in any new forecast other than leave 1pc for weird stuff. That's the reason I follow your forecasts edit. To clarify, I follow your forecasts for the smart (non consensus) stuff not the weird stuff!
@anneinak. I did some research on the one guy and read he was a consensus man (truly redacted, I laughed my cornflakes over the keyboard when I read it). That is part of the issue for sure...
@Anneinak: That chairperson was, I believe, Emmanuel Ibe Kachikwu, President of OPEC. Yes, he's new. But he's our friend. He's a definite ceiling truther! He acted, as I suggested above, with a phantom-limb reaction, like there must be some agreement, and when queried by the press, responded that there was an agreement and that it was to maintain "current actual production." More evidence that by not re-confirming the previous ceiling agreement, it lapsed (and yet he was psychologically driven to put forth *some* agreement). He's also the person, I believe, who went on to denigrate ceilings as mere "semantic" notions (as if to further excuse why there was not one any more existing).
Oh, the passion. This is truly a question for lawyers and historians. Good luck folks! I have dice and magic 8-ball ready to predict the judging on this one.
@redacted: I miss the & too. I probably should not admit to how sad I have been over having to make the change. However, I take some comfort in my new identity as a ceiling denier. :)
Is this another Rorschach (i.e. truthers see truth, deniers see deny?) or might this be enough to settle it one way or the other... I have a suspicion, but I'll share it AFTER the excerpt (so as not to introduce bias):
Halfway through last Friday's six-hour meeting, an unexpected dispute erupted over the defining feature of the cartel. In a move sources say was masterminded by Saudi Arabia, ministers finally agreed for the first time in decades to drop any reference to the 13-member group's output ceiling.
The pivot, which surprised not only markets but also some OPEC officials, appeared to be a direct response to Saudi Arabia's arch-rival Iran, which has made clear it intends to make a rapid return to global oil markets next year as nuclear-related sanctions are lifted.
With Tehran looking to pump as much as 1 million barrels per day (bpd) more crude into a market already saturated with excess supply, an increase of about 1 percent in world supply, maintaining or legitimizing any pretence of OPEC limits - no matter how notional - was not an option for Riyadh.
"The ceiling issue was very controversial and they could not decide on it," said an OPEC source briefed on the discussion inside the room. "Nobody was happy."
Earlier, another source said there was a "huge disagreement among members, even bigger now, as oversupply is no longer mainly coming from Gulf delegates, but from Iran."
In the near-term, the outcome of Friday's meeting probably makes little difference in global markets. Ever since last year, most members have been pumping flat-out to defend their market from fast-growing upstart rivals like U.S. shale drillers.
And anyway the group's 30 million bpd ceiling has largely been symbolic and, in practical terms, ignored.
Yet abandoning the pretence of production restraint threatens to intensify price wars between OPEC members, leaving them even less likely to agree on any market measures down the road, analysts said, and piling more pressure on prices.
[...]
All the same, on Friday morning, most delegates and experts anticipated a relatively straightforward meeting that would bless the free-market policy and rubber-stamp a production ceiling. The only likely change, so it seemed, might be raising the figure to 31.5 million bpd to reflect current output rates, rather than the long-exceeded 30 million bpd last reset four years ago.
After all, despite the price pain, there were signs that the dramatic strategy masterminded a year ago by Saudi oil minister Ali al-Naimi was working, albeit more slowly than hoped. Booming U.S. oil production has shifted into reverse, while the world's demand for oil has revved into a higher gear.
The first sign of confusion emerged more than 3 hours into the meeting as ministers broke for lunch.
Word leaked that the group had indeed agreed to raise its ceiling to 31.5 million bpd - but it was unclear whether the figure included Indonesia, which was rejoining the group after a hiatus, leaving a 0.9 million bpd margin of error.
Although the ceiling increase would have no material effect on actual production, the news sent oil prices tumbling by as much as $1 a barrel, pushing U.S. crude back below $40 a barrel, a response that was unlikely to have heartened ministers.
[...]
At this point many expected the meeting to adjourn quickly, as it had six months earlier. Instead, behind closed doors, officials continued to talk. More than 2 hours passed before stoney-faced ministers emerged, many heading quickly, and without comment, to the airport.
What fully transpired during that afternoon remains unclear. But several OPEC sources said ultimately a decision was reached that having no ceiling at all would be less negative for oil prices than having a higher ceiling.
There appears to have been little if any debate about Iran's production, although it has been clear for months that it will likely be the biggest challenge they face in 2016.
"We spent two minutes on that issue. You can't stop a sovereign country from coming back to the market. So, debating it is irrelevant," said Nigerian oil minister Emmanuel Ibe Kachikwu. "As a matter of fact, our position is that Iran would displace somebody who is not an OPEC member."
"From Saudi prospective, they have no allies. So staying the course makes sense for the Saudis," said veteran OPEC watcher Gary Ross, founder of Pira Energy thinktank.
Ministers later sought to play down any conflict. Most said they saw no problem in having no targets for a few months and agree new ones when Iran returns to the market, hoping by then for a deeper decline in U.S. oil production.
[...]
~~~~
COMMENT: The second sentence of the fifth last paragraph is key: "But several OPEC sources said ultimately a DECISION WAS REACHED THAT HAVING NO CEILING AT ALL would be less negative for oil prices than having a higher ceiling." If we pair this with the quote from the leader of OPEC, I think that's enough evidence to say that there was an announced change to OPEC's production quota.
@Einstein. Redacted will only accept if signed by all of them..... It's clear that pressure from press on this will likely require an opec clarification. It may be worth reverting back to 100pc awaiting for an announcement....? Edit. The statement a decision was reached must mean unanimous ..... that should then be easy to announce when challenged.... if true
000, I considered calling OPEC, but rejected the idea because that should be done and reported by GJ Admin. (An email at least produces something in writing.)
I most certainly found einsteinjs link from Reuters fascinating . . . and affirming.
OPEC fails to agree production ceiling
http://www.reuters.com/article/us-opec-meeting-idUSKBN0TM30B20151204
“We have no ceiling now.”
http://www.wsj.com/articles/opec-meeting-ends-with-no-production-cuts-1449248892
"failed to agree on an overall crude output ceiling"
http://www.platts.com/latest-news/oil/vienna/opec-fails-to-agree-crude-output-ceiling-to-meet-21568484
"We cannot put a number now"
http://m.apa.az/en/news/235976
"sheds symbolic output ceiling" ... "abandoning an official output ceiling"
http://fuelfix.com/blog/2015/12/04/opec-to-keep-pumping-crude/#36898101=0
"Ceilingless" ... "The ceiling of 30 million barrels a day, in place since 2011 and now abandoned"
http://www.bloomberg.com/news/articles/2015-12-04/opec-unity-shattered-as-saudi-led-policy-leads-to-no-limits-ihs9xu51
I beg to differ with some. If they have eliminated, or failed to agree upon, a so-called ceiling; that would indeed be a change.
@clinton: I'm struggling with the notion of trying to understand exactly what it is that we are forecasting. Are we to defer to what the local actors say? Is an S-300 missile, without other elements, an S-300 system, even if Dehghan says it is? Are we to accept OPEC saying the ceiling continues if simultaneously the delegates are not morally bound to any ceiling? Somewhere reality needs to take precedence.
@redacted. I would and did argue they were never morally bound to the number and that's why it was exceeded. Ultimately I have come to peace that the events transpired as I forecast. Due to the differing competing needs opec were unable to effect a change (up or down). I am not smart enough to foresee the assumed collapse of the system as you propose has occurred so there is no point me pretending i can do that in any new forecast other than leave 1pc for weird stuff. That's the reason I follow your forecasts edit. To clarify, I follow your forecasts for the smart (non consensus) stuff not the weird stuff!
@anneinak. I did some research on the one guy and read he was a consensus man (truly redacted, I laughed my cornflakes over the keyboard when I read it). That is part of the issue for sure...
@Anneinak: That chairperson was, I believe, Emmanuel Ibe Kachikwu, President of OPEC. Yes, he's new. But he's our friend. He's a definite ceiling truther! He acted, as I suggested above, with a phantom-limb reaction, like there must be some agreement, and when queried by the press, responded that there was an agreement and that it was to maintain "current actual production." More evidence that by not re-confirming the previous ceiling agreement, it lapsed (and yet he was psychologically driven to put forth *some* agreement). He's also the person, I believe, who went on to denigrate ceilings as mere "semantic" notions (as if to further excuse why there was not one any more existing).
Oh, the passion. This is truly a question for lawyers and historians. Good luck folks! I have dice and magic 8-ball ready to predict the judging on this one.
@redacted: I miss the & too. I probably should not admit to how sad I have been over having to make the change. However, I take some comfort in my new identity as a ceiling denier. :)
Is this another Rorschach (i.e. truthers see truth, deniers see deny?) or might this be enough to settle it one way or the other... I have a suspicion, but I'll share it AFTER the excerpt (so as not to introduce bias):
Dec 6: "Saudi-Iran rivalry sets scene for OPEC showdown over output" --> http://www.reuters.com/article/us-opec-meeting-idUSKBN0TQ00520151207
Halfway through last Friday's six-hour meeting, an unexpected dispute erupted over the defining feature of the cartel. In a move sources say was masterminded by Saudi Arabia, ministers finally agreed for the first time in decades to drop any reference to the 13-member group's output ceiling.
The pivot, which surprised not only markets but also some OPEC officials, appeared to be a direct response to Saudi Arabia's arch-rival Iran, which has made clear it intends to make a rapid return to global oil markets next year as nuclear-related sanctions are lifted.
With Tehran looking to pump as much as 1 million barrels per day (bpd) more crude into a market already saturated with excess supply, an increase of about 1 percent in world supply, maintaining or legitimizing any pretence of OPEC limits - no matter how notional - was not an option for Riyadh.
"The ceiling issue was very controversial and they could not decide on it," said an OPEC source briefed on the discussion inside the room. "Nobody was happy."
Earlier, another source said there was a "huge disagreement among members, even bigger now, as oversupply is no longer mainly coming from Gulf delegates, but from Iran."
In the near-term, the outcome of Friday's meeting probably makes little difference in global markets. Ever since last year, most members have been pumping flat-out to defend their market from fast-growing upstart rivals like U.S. shale drillers.
And anyway the group's 30 million bpd ceiling has largely been symbolic and, in practical terms, ignored.
Yet abandoning the pretence of production restraint threatens to intensify price wars between OPEC members, leaving them even less likely to agree on any market measures down the road, analysts said, and piling more pressure on prices.
[...]
All the same, on Friday morning, most delegates and experts anticipated a relatively straightforward meeting that would bless the free-market policy and rubber-stamp a production ceiling. The only likely change, so it seemed, might be raising the figure to 31.5 million bpd to reflect current output rates, rather than the long-exceeded 30 million bpd last reset four years ago.
After all, despite the price pain, there were signs that the dramatic strategy masterminded a year ago by Saudi oil minister Ali al-Naimi was working, albeit more slowly than hoped. Booming U.S. oil production has shifted into reverse, while the world's demand for oil has revved into a higher gear.
The first sign of confusion emerged more than 3 hours into the meeting as ministers broke for lunch.
Word leaked that the group had indeed agreed to raise its ceiling to 31.5 million bpd - but it was unclear whether the figure included Indonesia, which was rejoining the group after a hiatus, leaving a 0.9 million bpd margin of error.
Although the ceiling increase would have no material effect on actual production, the news sent oil prices tumbling by as much as $1 a barrel, pushing U.S. crude back below $40 a barrel, a response that was unlikely to have heartened ministers.
[...]
At this point many expected the meeting to adjourn quickly, as it had six months earlier. Instead, behind closed doors, officials continued to talk. More than 2 hours passed before stoney-faced ministers emerged, many heading quickly, and without comment, to the airport.
What fully transpired during that afternoon remains unclear. But several OPEC sources said ultimately a decision was reached that having no ceiling at all would be less negative for oil prices than having a higher ceiling.
There appears to have been little if any debate about Iran's production, although it has been clear for months that it will likely be the biggest challenge they face in 2016.
"We spent two minutes on that issue. You can't stop a sovereign country from coming back to the market. So, debating it is irrelevant," said Nigerian oil minister Emmanuel Ibe Kachikwu. "As a matter of fact, our position is that Iran would displace somebody who is not an OPEC member."
"From Saudi prospective, they have no allies. So staying the course makes sense for the Saudis," said veteran OPEC watcher Gary Ross, founder of Pira Energy thinktank.
Ministers later sought to play down any conflict. Most said they saw no problem in having no targets for a few months and agree new ones when Iran returns to the market, hoping by then for a deeper decline in U.S. oil production.
[...]
~~~~
COMMENT: The second sentence of the fifth last paragraph is key: "But several OPEC sources said ultimately a DECISION WAS REACHED THAT HAVING NO CEILING AT ALL would be less negative for oil prices than having a higher ceiling." If we pair this with the quote from the leader of OPEC, I think that's enough evidence to say that there was an announced change to OPEC's production quota.
@Einstein. Redacted will only accept if signed by all of them..... It's clear that pressure from press on this will likely require an opec clarification. It may be worth reverting back to 100pc awaiting for an announcement....? Edit. The statement a decision was reached must mean unanimous ..... that should then be easy to announce when challenged.... if true
Somebody with cell phone minutes please just call OPEC and ask.
000, I considered calling OPEC, but rejected the idea because that should be done and reported by GJ Admin. (An email at least produces something in writing.)
I most certainly found einsteinjs link from Reuters fascinating . . . and affirming.