Qatar estimate of the day

by on July 17, 2017 at 1:39 pm in Books, Current Affairs, Economics | Permalink

According to PFC Energy, a Washington DC consultancy, Venezuela requires an oil price of $95 a barrel to ensure macroeconomic security, Saudi Arabia $55.  Qatar, however, could still remain financially stable even with oil below $10 a barrel…It is the only significant oil exporter that was less dependent on higher oil prices in 2008 than in 2000.

That is from the new and useful book by Allen J. Fromherz, Qatar: A Modern History, updated edition, recently published by Georgetown University Press.

1 Kyle July 17, 2017 at 1:44 pm

Not surprising considering half of its workforce are slaves, essentially

2 Just Another MR Commentor July 17, 2017 at 2:07 pm

But that’s effectively true of Saudi as well. Maybe not half but they also have a lot of effectively enslaved foreign workers.

3 Axa July 17, 2017 at 2:09 pm

Indeed, women have no rights or voice.

4 Ray Lopez July 17, 2017 at 5:59 pm

Right Axa is, and most of the “slaves” are Overseas Foreign Workers who are being paid in Qatar more than in their home country.

5 Anon July 17, 2017 at 7:15 pm

True , Ray and its by their choice. But when one reads of the deaths and the conditions that apply in many cases , they still ARE richer slaves. Ironically next to South Asians , its the Filipinos who are probably second in the expat population of the middle east , so may be you can talk to your neighbors ( if you are really living in the Philippines ) and get more details of the conditions in Qatar and the Middle east.

6 Ray Lopez July 17, 2017 at 9:35 pm

OK Anon…I don’t have to take to my neighbors, just my in-laws, haha. Right now I’m back in the USA taking care of some business.

7 Artimus July 18, 2017 at 12:46 am

@Anon, since Ray is in the US I will take over for him and talk to my neighbors, co-workers and friends that are Filipino(I live in Dubai). Some are happy here, some are content, some don’t like it, but the overwhelming majority are making more coin than they would at home and have no plans to leave.

8 Ricardo July 18, 2017 at 11:41 am

There is a class system among Filipino and South Asian workers in the Middle East. It is pretty easy to find people from both places serving in customer service and white collar roles of various sorts — they are presumably no more miserable than the average person in such a job in any country. Construction workers have it much worse and that is where you hear the stories of people being virtually imprisoned on company property, cheated out of their salaries, and having their passports confiscated by their employers.

9 LNG July 17, 2017 at 1:51 pm

That’s because Qatar mainly exports LNG, which has a negligible relationship to spot crude prices. Some older contracts are indexed to crude, but you see little of that anymore. With 2.7x as much LNG as crude production it doesn’t mean much to quote its solvency at any crude price. Also, given that most of the LNG sold is on multi-decade contracts they’re effectively hedged against spot LNG price declines.

10 rayward July 17, 2017 at 2:19 pm

“In 2006, Qatar became the world’s biggest exporter of LNG. As of 2012, Qatar is the source of 25 percent of the world’s LNG exports.” https://en.wikipedia.org/wiki/Liquefied_natural_gas#World_total_production

11 libert July 17, 2017 at 2:36 pm

This.

On the oil side, Qatar exports 0.5 million barrels per day, or about 180 million barrels in a year (http://www.opec.org/opec_web/en/about_us/168.htm). At $45/bbl, that’s worth ~$8 bln.

On the gas side, it exports ~5 trillion cubic feet per year, easily worth $13+ bln even at currently low gas prices of $3 per mcf.

Thus, a $1 move in the gas price (e.g., $3 -> $4) would have the same impact on Qatar’s export revenue as a $30 move in the crude price (i.e., $45 -> $15) would.

12 LNG July 17, 2017 at 2:45 pm

Good sensitivity, thanks. One thing, the price you’re referring to at $3/mcf is Henry Hub in Louisiana. LNG prices are going to be higher, spot price is $5-6/mcf this morning and Qatar likely has some long-term contracts signed in the days of low-teen pricing. So LNG revenue might be a touch higher.

13 Ray Lopez July 17, 2017 at 6:07 pm

That’s interesting. I was for many years, foolishly, an investor in Magellan Petroleum, “run by” William F. Buckley, the right-wing media guy, and it was sold to Tellurian (TELL.O) run by a pair one of which was fired by Carl Ichan (Charif Souki and Martin Houston) but have big plans in natural gas. When you hear such things generally you should run, and I did, cutting my losses.

14 libert July 18, 2017 at 9:36 am

Thanks LNG, good point. I suspected the same, but when I googled Qatari LNG export prices, I came up mostly dry, only finding the two numbers below. They are both around $3, so I went with that.

https://www.eia.gov/dnav/ng/hist/n9103qr3a.htm says $3.45
http://www.indexmundi.com/commodities/?commodity=natural-gas&currency=qar says 10.7 Qatari Riyal, which equals $2.90 in USD at the FX of 3.7 Riyal/USD.

15 libert July 18, 2017 at 9:39 am

Although now I notice that the indexmundi data is not actually for Qatari gas, but rather Henry Hub gas in Qatari currency…oops…

16 dearieme July 17, 2017 at 2:21 pm

“Venezuela requires an oil price of $95 a barrel to ensure macroeconomic security”: might this be in any way related to the fact that they’ve been run recently by thieving, malevolent dolts?

17 MOFO July 17, 2017 at 2:23 pm

Nope, yanqui imperialism.

18 Anonymous July 17, 2017 at 2:32 pm

World Oil says their engineers beat feet to more supportive regimes.

http://www.worldoil.com/news/2017/4/12/no-easy-fix-for-venezuela-oil-as-production-declines

I’m surprised in a different way though. I thought Venezuelan oil was “easy,” just an undesirable product (suitable for bunker fuel and that’s about it). Weird that would share a break even price regime with more attractive product.

19 Daniel Weber July 17, 2017 at 5:05 pm

It takes specialized skill to keep an oil field alive. You won’t notice right away, just like Microsoft or Google wouldn’t notice for a while if someone got rid of all the software engineers there, but eventually it would be disastrous.

20 TMC July 17, 2017 at 5:14 pm

“to ensure macroeconomic security” Not that it isn’t profitable at a lesser price.

21 mulp July 17, 2017 at 4:00 pm

They merely implement Reagan’s policies on labor costs with different winners and losers than conservatives would pick.

Reagan wanted lower wages and incomes to benefit the rent seekers and monopolists.
Chavez wanted lower wages and incomes so he could give more stuff to consumers.

Since Reagan, workers are worse off.
Since Chávez, workers are worse off.

Only when economics has zero winners and losers can it be considered a viable theory.

22 Dude July 18, 2017 at 9:28 am

Impressive comment.

23 farmer July 17, 2017 at 4:43 pm

I’m no fan of the Chavez-istas, but in this case that’s only partly to blame. The quality of oil from Alberta and Venezuela is worse, requiring more post-production to be vendable

24 Dan July 17, 2017 at 2:52 pm

Wait, the current price for a barrel of oil is $46.06… so does Saudi Arabia lack “macroeconomic security” now, whatever that means?

25 jmo July 17, 2017 at 3:05 pm

Yes, the Saudi’s are spending down their reserves. They are also looking to take Aramco public to raise much needed cash.

26 The Anti-Gnostic July 18, 2017 at 6:33 am

I think it means, “ability to sustain the dole.”

27 JCC July 17, 2017 at 3:07 pm

Qatar is on top of tremendous natural gas reserves and gas seems to have a brighter future than crude oil…

28 The Cuckmeister-General July 17, 2017 at 3:18 pm

Okay important question: Cutter or Cut-tar?

29 sunbomb July 17, 2017 at 4:15 pm

Khathurr

30 Jeff R July 17, 2017 at 5:22 pm

I’ve heard ‘Cotter’ before, too, just to make it extra confusing.

31 rpenm July 17, 2017 at 6:15 pm

Like “guitar” with the g closer to a k.

32 Thor July 17, 2017 at 6:40 pm

Wait, you are taking a break from your cuckolding to post something?

Miraculous!

33 Thor July 17, 2017 at 6:41 pm

Just pronounce it “Coulter” to your MSNBC friends and see what the response is.

34 Anon July 17, 2017 at 7:22 pm

When Coulter books a window seat , changes it to an aisle seat and throws a fit and kicks up a row when she gets a window seat again ( all in the same Row , with the same leg space) , to the extent of tweeting pictures of fellow passengers ( who did nothing wrong) to her followers , very soon the response will be the same from many more Americans , not just MSNBC friends.

35 Artimus July 18, 2017 at 12:49 am

I agree, the whole way she handled that was rather vile.

36 Silas Barta July 17, 2017 at 3:18 pm

America and most developed countries could do fine on $0/barrel :-p

37 mulp July 17, 2017 at 4:14 pm

A carbon tax on fossil fuel burning of $250 a ton would make the price of oil $0 while creating $1 in wages for every $1 paid for energy.

That IS THE FUTURE, unless the rapture, Armageddon, or other event wipes out civilization in less than two centuries.

Which is a really short time in the context of human civilization.

And not even a period on a footnote on the history of the universe.

38 FYI July 17, 2017 at 4:43 pm

Have you been to China??? They are burning coal like is 1975. There is no carbon tax that can solve global warming. It’s just a nice idea sold by people who don’t understand the world outside of US/Europe.

39 The Other Jim July 17, 2017 at 4:45 pm

… or the sun, for that matter.

40 Ray Lopez July 17, 2017 at 9:45 pm

Off topic: “The officer in the passenger seat, identified by local media as Mohamed Noor, drew his gun and shot Ms Damond through the driver’s window, the newspaper reported. ” – OMG, it was a Muslim cop. Steve Sailer is going to have a field day.

41 Moo cow July 17, 2017 at 10:19 pm

Tragic. Both officers on the call had switched off their cameras. And the camera in the squad car wasn’t on either.

She had been the one who called the cops in the first place.

Lesson: cops are not your friend. Just like the hospital. Try to stay away.

42 chuck martel July 17, 2017 at 11:18 pm

The Minnesota State Bureau of Criminal Apprehension is investigating the case now. That means they’re taking the time to come up with a good story. Two cops, one dead woman, no witnesses. It was just an accident.

43 The Anti-Gnostic July 18, 2017 at 6:38 am

Well frankly, we live in a time when every day is an iSteve field day.

44 Dick the Butcher July 18, 2017 at 8:23 am

If it were not for double standards, you’d have no standard at all.

Imagine if it had been a white cop and a black, female dead. You know this would be 24/7 in the media and riots (hot time Summer in the city . . .) in the usual blood-red cities.

45 Daniel Weber July 18, 2017 at 10:19 am

How do Australians riot?

46 angelnball July 19, 2017 at 2:29 am

fairly ineffectually although more impressively than some

https://infogalactic.com/info/Cronulla_riot

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