In U-Turn, Saudis Choose Higher Prices Over Free Oil Markets

Russia, too, has kept the pumping party going. As OPEC was meeting in Algiers, Moscow announced that the country's output smashed a post-Soviet record in September, reaching 11.1 million barrels a day. That's up about 400,000 barrels from August, roughly what OPEC member Ecuador produces.

Mexico, Norway and other non-OPEC countries may join Russia in pushing forward. So may U.S. shale drillers. Stephen Schork, president of consulting firm Schork Group Inc. in Villanova, Pennsylvania, said he was surprised by the OPEC decision -- and skeptical that Saudi Arabia can get other producers to cooperate. 

"There will still be too much oil on the market," Schork said.

--With assistance from Mark Shenk, Nayla Razzouk, Wael Mahdi and Angelina Rascouet. To contact the reporters on this story: Javier Blas in London at jblas3@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net. To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Bob Ivry, Anne Reifenberg


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WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Leslie  |  September 30, 2016
Oil is a resource, just like coal, timber and copper. Resources go up, and they go down, influenced by the geopolitical climate at the time. Both $27/bbl and $120/bbl were extremes, but anyone who thinks those extremes wont come again is ignoring history.
okay2  |  September 29, 2016
if Chinas porperty boom slows, chinese oil imports will decrease and that will seriously affect demand, i reckon... China is the ultimate wild card, in my view.
john weaver  |  September 29, 2016
If the USA doesn't replace reserves, we will be dying on the vine.
Tom  |  September 29, 2016
This commodity market is forever changed. The rise of Asia (China & India) coupled with a strong North American economy during the late 90s into the 2000s caused a huge supply deficit. The resulting boom in the Oil & Gas industry awoke a sleeping giant. This boom was so vast and so strong that traditionally automotive and even aerospace manufacturing suppliers directed their resources to support O&G manufacturing needs. Major machine tool manufacturers began changing their machine designs specific to oil & gas component needs. Worldwide new technologies, new finds and newly advanced drilling and pumping methods were all created and improved. As a result of this world-wide effort soon came production developments in every continent of the world (onshore & offshore). Moreover, the advent of LEDs, electric or alternative fuel cars, new generations turbine engines (30% more efficient), all have added to oversupplies of Oil and Gas. Short of a large scale war the average price of Oil over the next 35-50 years will be in the mid $30s with lows reaching into the mid-teens at times. This is a testament to man's innovation, development, progress and a world market. Nevertheless, the days of $70+ or $100+ are forever gone. BANK ON IT!


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