Professional Documents
Culture Documents
Subject:
Date:
To:
Dear Chiefs of Staff of the Senate Energy & Natural Resources Committee (ENR) and the
Nebraska Senate Delegation,
.
Today, OPEC dashed the hopes, wishes and dreams of the U.S. petroleum industry and
Canadian tarsands operations. It is now one year since the long awaited decision last
November, 2014. Is todays decision any surprise? Not if you keep up with the situation.
Testimony at your four hearings this year gave no consideration to the eventuality that the
Saudis would continue their tact, and as a result, we have have two bills which are invalidated
by the Saudi persistence to maintain market share:
Bit.ly/S_2011_Offshore_Production_and_Energizing_National_Security_Act_of_2015_OPENS
Bit.ly/S_2012_The_Energy_Policy_Modernization_Act_EPMA
It is past time to invite the CEOs from the petroleum industry to testify as to their intentions,
dilemmas or ability to act in the Public and National Interest in conflict with fiduciary duty as
low oil and gas prices persist.
Doug Grandt
OPEC had been widely expected to stick with its year-old policy, despite pressure from poorer
members of the cartel for a cut in output to prop up the price of oil.
OPEC sources said it had agreed to raise its output ceiling to 31.5 million bpd at its
meeting in Vienna, in what appeared to be an effective acknowledgement of existing
production.
Again Capital founding partner John Kilduff told CNBC that forecasts of OPEC production
levels put output above the current ceiling of 30 million barrels per day.
OPEC supply rose in November to 31.77 million barrels per day (bpd) from 31.64 million in
October, according to a Reuters survey, based on shipping data and information from sources
at oil companies, OPEC and consultants.
"Overall, it looks like business as usual. The production cut needs to come from outside
OPEC, so attention turning back to U.S. producers," Saxo Bank senior manager Ole Hansen
In the last few weeks, investors have run up big bearish bets, or short positions, betting
on a fall in the price of crude oil.
The dollar rose, which would ordinarily depress oil prices as this strength can encourage nonU.S. investors in crude to sell their holdings in exchange for a higher profit in their own
currency.
But Thursday's 2-percent slide in the greenback, triggered by a surging euro, left the dollar
near its weakest in a month.
The dollar gained some ground after monthly U.S. government data showed a gain of 211,000
jobs in November, offering further evidence the Federal Reserve would raise interest rates for
the first time in nearly a decade.
On the demand side, China is likely to double its strategic crude oil purchases next year to
take advantage of a more than a 60 percent fall in oil prices since June 2014. Beijing will add
70-90 million barrels of crude to storage tanks in 2016 to build up its strategic petroleum
reserves (SPR), according to most respondents in a poll of five analysts and data collected by
Reuters analysts.
CNBC's Tom DiChristopher contributed to this report.