January 15, 2016

...AND CHEAPER...:

Saudi Arabia's oil strategy tears OPEC apart (John Defterios, 1/15/16, CNNMoney)

OPEC's last big foray to move the market came in 2009, when crude shot up to $147 a barrel.

Saudi Arabia opened the taps to bring prices lower, then dialed them back when oil collapsed to $40 a barrel. Prices then stabilized, but since then, the U.S. added four million barrels a day of production, which has been a global game changer.

Chris Faulkner, CEO of Dallas-based oil fracker Breitling Energy, is convinced OPEC will not reverse its stance even if U.S. output falls from a peak of 9.6 million barrels a day to an estimated 8 million by the end of 2016.

Faulkner says he constantly gets asked, "when is America going away?" in reference to shale production. The reality is the small and medium sized players are elastic and can rev back up if oil recovers and stabilizes at $50.

This is why the U.S. shale revolution, and Russia's record output of nearly 11 million barrels a day, are creating unprecedented tension within OPEC.

Nigeria's Kachikwu said there was a near mutiny at OPEC's December meeting, with African and Latin American producers threatening to walk out as a block because of the pain they're feeling.

Posted by at January 15, 2016 1:07 PM

  

« LIVE AS ONE, DIE AS ONE: | Main | WHY "FASCIST" IS NO SLUR: »