From Bloomberg Gadfly:
The second coming of shale could be even more powerful than the first. OPEC seems to be getting caught unawares.
The current boom in U.S. oil production is even stronger now than the run from July 2011 to April 2015. And this is with oil prices at half their previous level and before President Donald Trump has done anything to meet his pledge to "lift the restrictions on American energy and allow this wealth to pour into our communities." Output growth could accelerate if prices rise, or costs fall further.
This is not how it was meant to be. OPEC launched a strategy to protect market share in 2014 with a specific aim to knock out high-cost oil production such as shale. After the group succumbed to internal financial pressures and agreed in November to cut output by around 1.2 million barrels a day, Saudi oil minister Khalid Al-Falih said he didn't expect a big supply response from American shale producers in 2017.Read more by clicking here.
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