OPEC’s shale conundrum
According to the US Energy Information Administration US shale production is set to increase for the 12th consecutive month to 6.17m barrels of oil per day in December as producers respond to a stronger oil price.
This underlines the challenge facing producers’ cartel OPEC and fellow oil producing nations following their widely-expected decision (30 Nov) to extend production cuts from March 2018 through to the end of next year.
Their aim is to arrive at a Goldilocks oil price which is high enough to balance their budgets but low enough to prevent a revived shale boom. They look to be achieving the former but not the latter.