Citigroup: Shale Will Prevail in Battle with OPEC

From Bloomberg:
U.S. shale oil will prevail over OPEC as the two rivals compete in an oversupplied world market, Citigroup Inc.’s head of research said. 
The Organization of Petroleum Exporting Countries and its allies may have boosted oil prices by cutting production, but they’re losing revenue in the process and their position “is not sustainable over a long period,” Citigroup’s Ed Morse said in a Bloomberg television interview on Tuesday. On the other hand, U.S. shale drillers have adapted to survive prices as low as $40, he said. 
“In the end, the markets are going to win, and it’s going to be shale,” Morse said. “If we’re in a $40 to $45 world, we’ll have enough drilling to add to the surplus in the world as a whole.” 
Oil prices have lost 12 percent in London this year, trading near $50 a barrel, as output curbs by OPEC, Russia and other partners fail to drain a global surplus. U.S. shale explorers have boosted drilling and are poised to reach a record output next month, plugging some of the gap left by OPEC’s cutbacks.
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