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Trump's budget undermines OPEC's efforts to support oil prices
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Trump's budget undermines OPEC's efforts to support oil prices
Trump's budget undermines OPEC's efforts to support oil prices
May 24, 2017
Washington - The White House wants to sell half of the government's strategic oil reserves and allow exploration in a Alaska wildlife reserve as part of plans to bring budget revenues and expenditures into line over the next 10 years, US documents showed.
Although the White House's draft budget presented to Congress yesterday may not apply as it currently stands, it reveals what the administration's policy is about and includes increasing US energy production.
The US strategic reserve, the highest in the world, is about 688 million barrels of crude and is kept in underground tanks in Louisiana and Texas.
Congress decided in 1975 to set up reserves after an Arab ban on oil exports raised fears of rising car fuel prices in the long term, damaging the US economy. The Trump budget proposes to start selling in the next fiscal year, which starts in early October. The documents indicate that sales in the first fiscal year could provide a budget of about $ 500 million.
688 million barrels of US reserves, which Trump intends to sell half of them in 10 years
Sales from the reserves will gradually increase over the next few years to $ 3.9 billion in 2027. Sales over 10 years could amount to more than $ 17 billion in current crude oil prices.
The announcement surprised oil markets and pushed US crude prices for immediate delivery to about $ 50 in Asian trade. The draft budget, released after Trump's departure from Saudi Arabia, is seen as undermining OPEC-led plans to curb supply oversupply by cutting production. The availability of supplies is likely to continue in the future.
Trump's budget also aims to raise $ 1.8 billion over the next decade through exploration contracts in Alaska's natural reserve, the largest natural reserve in the United States and believed to be rich in crude reserves.
Increased production from Alaska will boost US oil production, which has jumped 10 percent since the middle of last year to about 9.3 million bpd thanks mainly to the recovery of rock oil production.
Meanwhile, signs of OPEC's agreement to extend output cuts in cooperation with independent producers have increased at the joint meeting in Vienna on Thursday.
Officials are likely to extend the production cut for 9 months from the end of the current agreement at the end of next month. They did not rule out deepening the cut to more than 1.8 million bpd in the current deal.
Essam al-Marzouq: Norway, Turkmenistan and Egypt have expressed their willingness to participate in oil production cuts
Kuwaiti Oil Minister Essam al-Marzouq said on Saturday that Saudi Arabia had spoken to countries including Norway, Turkmenistan and Egypt, and that they had indicated their willingness to participate in crude production cuts.
Mexico also said yesterday it supports production cuts by OPEC and independent producers as a means to stabilize oil markets and bring new investment to the growing domestic energy sector.
Saudi Energy Minister Khalid al-Faleh appeared to have been able to extract a greater commitment from Iraq to cut output during his visit to Baghdad on Monday after Baghdad repeatedly demanded that it be relieved of the cuts because of its economic crisis and war costs.
"I met Iraqi Prime Minister Haider al-Abadi. He gave the green light to the oil minister to approve what will be presented at the Vienna meeting by extending the production reduction agreement for 9 months. "
But he added during a press conference with Iraqi Oil Minister Jabbar Laibi in Baghdad that this "does not cancel the discussions and proposals, which will be presented at the Vienna meeting of oil exporters from within and outside OPEC."
"We hope that the visit of the Saudi minister will be a new page of relations between the two countries," he said.
The OPEC countries agreed in November to reduce their production of oil by 1.2 million barrels per day, while 11 other non-members of the Organization, including Russia, agreed to reduce production by 600 thousand barrels per day.
The deal entered into force early last year for a period of 6 months to restore balance between supply and demand, and then improve oil prices.
Saudi Arabia and Russia have been ahead of the upcoming OPEC meeting and announced earlier this month their support for extending an oil production cut for another 9 months until the end of March 2018.
UAE Energy Minister Suhail al-Mazroui also announced yesterday that his country supports the extension of oil production cuts. He said that the previous extension helped to balance the oil market and maintain an average price despite the increase in oil production rock.
LINK
May 24, 2017
Washington - The White House wants to sell half of the government's strategic oil reserves and allow exploration in a Alaska wildlife reserve as part of plans to bring budget revenues and expenditures into line over the next 10 years, US documents showed.
Although the White House's draft budget presented to Congress yesterday may not apply as it currently stands, it reveals what the administration's policy is about and includes increasing US energy production.
The US strategic reserve, the highest in the world, is about 688 million barrels of crude and is kept in underground tanks in Louisiana and Texas.
Congress decided in 1975 to set up reserves after an Arab ban on oil exports raised fears of rising car fuel prices in the long term, damaging the US economy. The Trump budget proposes to start selling in the next fiscal year, which starts in early October. The documents indicate that sales in the first fiscal year could provide a budget of about $ 500 million.
688 million barrels of US reserves, which Trump intends to sell half of them in 10 years
Sales from the reserves will gradually increase over the next few years to $ 3.9 billion in 2027. Sales over 10 years could amount to more than $ 17 billion in current crude oil prices.
The announcement surprised oil markets and pushed US crude prices for immediate delivery to about $ 50 in Asian trade. The draft budget, released after Trump's departure from Saudi Arabia, is seen as undermining OPEC-led plans to curb supply oversupply by cutting production. The availability of supplies is likely to continue in the future.
Trump's budget also aims to raise $ 1.8 billion over the next decade through exploration contracts in Alaska's natural reserve, the largest natural reserve in the United States and believed to be rich in crude reserves.
Increased production from Alaska will boost US oil production, which has jumped 10 percent since the middle of last year to about 9.3 million bpd thanks mainly to the recovery of rock oil production.
Meanwhile, signs of OPEC's agreement to extend output cuts in cooperation with independent producers have increased at the joint meeting in Vienna on Thursday.
Officials are likely to extend the production cut for 9 months from the end of the current agreement at the end of next month. They did not rule out deepening the cut to more than 1.8 million bpd in the current deal.
Essam al-Marzouq: Norway, Turkmenistan and Egypt have expressed their willingness to participate in oil production cuts
Kuwaiti Oil Minister Essam al-Marzouq said on Saturday that Saudi Arabia had spoken to countries including Norway, Turkmenistan and Egypt, and that they had indicated their willingness to participate in crude production cuts.
Mexico also said yesterday it supports production cuts by OPEC and independent producers as a means to stabilize oil markets and bring new investment to the growing domestic energy sector.
Saudi Energy Minister Khalid al-Faleh appeared to have been able to extract a greater commitment from Iraq to cut output during his visit to Baghdad on Monday after Baghdad repeatedly demanded that it be relieved of the cuts because of its economic crisis and war costs.
"I met Iraqi Prime Minister Haider al-Abadi. He gave the green light to the oil minister to approve what will be presented at the Vienna meeting by extending the production reduction agreement for 9 months. "
But he added during a press conference with Iraqi Oil Minister Jabbar Laibi in Baghdad that this "does not cancel the discussions and proposals, which will be presented at the Vienna meeting of oil exporters from within and outside OPEC."
"We hope that the visit of the Saudi minister will be a new page of relations between the two countries," he said.
The OPEC countries agreed in November to reduce their production of oil by 1.2 million barrels per day, while 11 other non-members of the Organization, including Russia, agreed to reduce production by 600 thousand barrels per day.
The deal entered into force early last year for a period of 6 months to restore balance between supply and demand, and then improve oil prices.
Saudi Arabia and Russia have been ahead of the upcoming OPEC meeting and announced earlier this month their support for extending an oil production cut for another 9 months until the end of March 2018.
UAE Energy Minister Suhail al-Mazroui also announced yesterday that his country supports the extension of oil production cuts. He said that the previous extension helped to balance the oil market and maintain an average price despite the increase in oil production rock.
LINK
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RamblerNash- GURU HUNTER
- Posts : 24269
Join date : 2015-02-19
Pretty Poor
Iraq is slowly going bankrupt, and if it were not for the billions in loans from the IMF/World Bank, Iraq would be in serious trouble. Their foreign reserves have fallen about 20% in the past couple of years. Now THIS:
------------------------------------------------------------------
Saudi Energy Minister Khalid al-Faleh appeared to have been able to extract a greater commitment from Iraq to cut output during his visit to Baghdad on Monday after Baghdad repeatedly demanded that it be relieved of the cuts because of its economic crisis and war costs.
"I met Iraqi Prime Minister Haider al-Abadi. He gave the green light to the oil minister to approve what will be presented at the Vienna meeting by extending the production reduction agreement for 9 months. """"""
------------------------------------------------------------------
Not a smart move to cut production for the next 9 months. Expect the reserves to go lower. Why would the IMF/World Bank do anything more for Iraq while Iraq is purposely reducing its revenues??? Certainly not allow Iraq to RV...That would be the last thing to be contemplated.
------------------------------------------------------------------
Saudi Energy Minister Khalid al-Faleh appeared to have been able to extract a greater commitment from Iraq to cut output during his visit to Baghdad on Monday after Baghdad repeatedly demanded that it be relieved of the cuts because of its economic crisis and war costs.
"I met Iraqi Prime Minister Haider al-Abadi. He gave the green light to the oil minister to approve what will be presented at the Vienna meeting by extending the production reduction agreement for 9 months. """"""
------------------------------------------------------------------
Not a smart move to cut production for the next 9 months. Expect the reserves to go lower. Why would the IMF/World Bank do anything more for Iraq while Iraq is purposely reducing its revenues??? Certainly not allow Iraq to RV...That would be the last thing to be contemplated.
Scotchie- VIP Member
- Posts : 1534
Join date : 2017-04-15
None of This Will Matter Soon
umiumi12- Guest
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