Russia paired with the Organization of the Petroleum Exporting Countries last year in cutting oil output jointly by 1.8 million barrels per day (bpd), a deal they say has largely rebalanced the market and one that has helped elevate benchmark Brent prices LCOc1 close to four-year highs.
Now, the relatively high prices brought about by that pact, coupled with surging U.S. output, are making it harder to sell Russian, Nigerian and other oil grades in Europe, traders said.
“U.S. oil is on offer everywhere,” said a trader with a Mediterranean refiner, who regularly buys Russian and Caspian Sea crude and has recently started purchasing U.S. oil. “It puts local grades under a lot of pressure.”
U.S. oil output is expected to hit 10.7 million bpd this year, rivaling that of top producers Russia and Saudi Arabia.
It is a balancing factor that may work to pay down the national debt over time.
ReplyDeleteThe US still imports 4 million bpd of oil. The Persian Gulf produces about 20% of total world oil consumption and 40% of consumption by the OECD countries. Fracking has been a God-send to America, especially since Europeans don't permit it. But we are some distance from energy independence.
ReplyDeleteIf we're flooding the world with cheap American oil, why are our gas prices so high and getting higher?
ReplyDeleteI can remember when gas normally cost $0.23/gal, unless there was a "gas war," when it got down to $0.04/gal. I liked those days better in lots of other ways, too!
law if supply and demand. euros are paying $4.50 per LITER for good gas. we are sending gas to euro because they pay more for the product. the petro industry is really hair raising economics dealing with amounts of cash that make many medium sized economies look really poor.
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