best stock advisory company in indorecommodity tipsFutures tipmcx tipsstock market advisory tipsStock Market TipsTop 10 advisory company in Indore
NCDEX tips, Analysis - US shale surge sends warning to OPEC
OPEC’s price defense strategy might threaten its market share if carried too far
• For Live Stock Market Tips Update Visit www.ripplesadvisory.com
US crude oil production is set to increase by more than 1.2 million barrels per day in 2018 compared with 2017, according to the latest short-term forecasts from the US Energy Information Administration.
US crude production will average almost 10.6 million barrels per day (bpd) this year compared with 9.3 million bpd in 2017. The forecast has been revised sharply higher from less than 10.3 million bpd at the time of the last prediction in January 2018 and 9.9 million bpd in July 2017.
Fine line
Surging output from shale underscores the growing competitive threat to members of the Organization of the Petroleum Exporting Countries and its allies led by Russia. Efforts to restrain production under the cooperation framework between OPEC and non-OPEC allies risk back-firing.
The cooperating countries are already conceding market share to the shale producers, in a re-run of the situation before oil prices slumped in 2014. If production restraint succeeds in drawing down global inventories even further and pushes Brent significantly above $70 per barrel, the resulting shale surge and a slowdown in consumption growth will intensify the danger.
Exit plan
OPEC and its allies need to start planning an exit from their production agreement with the goal of capturing at least some incremental market demand in 2018 and 2019 while preventing another slump in prices.
0 comments
Note: only a member of this blog may post a comment.