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Sunday, 23 April 2017

Shale's the Wild Horse OPEC Can't Tame - Bloomberg Gadfly

Shale's the Wild Horse OPEC Can't Tame - Bloomberg Gadfly:

"It was all so simple. By lifting restraints on output, Saudi Arabia would stop subsidizing high-cost oil producers and halt the rapid rise in U.S. production that was eating into OPEC's market share. At least, that was the logic back in November 2014.But things haven't gone according to plan. OPEC's four-month experiment with production curbs has failed. More worryingly, the strength of shale's rebound suggests that OPEC faces a long-term struggle against this new source of supply in an industry where technological advances are the norm and today's niche play becomes the next decade's global standard.Even when the group restored production curbs last year, Saudi Energy Minister Khalid al-Falih said he didn’t expect a big supply response from American shale producers in 2017. In fact, it turns out that response had already begun, and it is much stronger than anyone had expected."

'via Blog this'