From the first article:
When OPEC meets with Russia and other allies in Vienna this week, they won’t be able to declare “Mission Accomplished” in their ﬁght to end the oil glut. Instead, the producers are expected to extend their production cuts to the end of 2018 to counteract the historic surge in U.S. output. In the year since Saudi Arabia abandoned its battle for market share and led an agreement to cut supply instead, international benchmark Brent crude has risen by more than a third. That’s helped cash-strapped petrostates, but also spurred U.S. output to a 35-year high. The tug of war between shale and OPEC that’s dominated the oil market for three years shows no sign of ending.Click here to view that article page, which includes a timeline detailing the past three years of ups and downs in the international oil market.
From the second article:
The clash between OPEC and America’s oil industry is reaching a day of reckoning.Click here to read that whole article.
The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets.
So far, it’s worked -- global oil stockpiles are draining and prices are near two-year highs. But as the Organization of Petroleum Exporting Countries and Russia prepare to meet in Vienna this week to extend production cuts, ministers have little idea how U.S. shale production will respond in 2018.
“The production cuts are effective -- it was absolutely the right decision, and the fact of striking a deal with Russia was crucial,” said Paolo Scaroni, vice-chairman of NM Rothschild & Sons and former chief executive officer of Italian oil giant Eni SpA. Nonetheless, “OPEC has not the same power. The U.S. becoming the biggest producer of oil in the world is a dramatic change.”
OPEC did meet yesterday, and agreed to extend production cuts. That has sent prices upward even further. From CNBC:
Oil prices spiked higher on Friday, heading toward 2½-year highs the morning after two dozen crude-producing nations agreed to limit their output through the end of 2018.
U.S. West Texas Intermediate crude prices rocketed up 98 cents per barrel, or 1.7 percent, to $58.38 by 11:15 a.m. ET. That put the contract within striking distance of $59.05, its peak for this year and the highest level since July 2015.
International benchmark Brent crude surged $1.11, or 1.8 percent, to $63.74, not far off last month's high of $64.65 that marked the best intraday level since June 2015.Click here to read more.
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