OPEC Clash With U.S. for Oil Supremacy Near Day of Reckoning

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The clash between OPEC and America’s oil industry is reaching a day of reckoning.

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.”

more.  https://www.bloomberg.com/news/articles/2017-11-27/opec-battle-with-u-s-for-oil-supremacy-nears-day-of-reckoning

[IsailedawayfromFR]

The clash between OPEC and America’s oil industry is reaching a day of reckoning.

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.”

more.  https://www.bloomberg.com/news/articles/2017-11-27/opec-battle-with-u-s-for-oil-supremacy-nears-day-of-reckoning

Thanks for article. 

I agree with the author that, although the US shale oil success has temporarily stymied OPEC, OPEC is not going away.  They still control the largest amount of readily-accessible oil in the world and will there when the easy oil from shales abates.

Yes, there is a lot of oil shale in the ground, but geology dictates which are more accessible than others.  I for one believe the places where oil can be profitably extracted are limited, and the boom so far is related to just those few.

Oil Shales exist everywhere an oil field has been found, so do you ever wonder why you do not hear about oil shale discoveries being made in very many fields?