Shale Output Hasn't Grown This Fast Since Oil Was at $100

Ivan Schwartz
February 16, 2018

It seems clear that their position is that USA shale oil production can indeed interfere with OPEC's plans, which begs the question of how long private energy companies like those in Russian Federation can sit back and watch their bottom lines drop.

This is coming as the Managing Director of Nigeria LNG Limited (NLNG), Mr.

OPEC compliance with the oil output cut deal has reached 137 percent, the International Energy Agency (IEA) said in its Oil Market Report.

"In early 2018, the situation is reminiscent of the first wave of United States shale growth that, riding the tide of high oil prices in the early years of this decade, made big gains in terms of market share and eventually in 2014 forced a historic change of policy by leading producers".

Oil demand grew at a rate of 1.6 million bpd in 2017, the IEA said in its monthly market report.

If production restraint succeeds in drawing down global inventories even further, and pushes Brent significantly above $70 per barrel, the resulting shale surge and slowdown in consumption growth will intensify the danger.

Oil prices retreated slightly on Tuesday, erasing gains made yesterday after fresh forecasts predicted that supply could surpass demand in 2018 despite OPEC's best efforts to keep supply contained.

But with US equities rebounding on Friday and Asian markets seemingly steadying on Monday, analysts said crude was also supported. Market situation in early 2018; seem to be suggestive of that first wave of US shale growth, encouraging the IEA to apprise history might be restating itself.

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Since the start of the OPEC-led supply cuts in January 2017, oil prices have risen by 20 percent, though prices in February have come under pressure again in large part due to soaring US output. However, there is a question mark over the sustainability of growth in shale oil.

The bank, however, said that it received some pushback to its call for acceleration of demand growth in India, but investors expressed confidence that "China could continue to be a source of upside surprise". OPEC, with help from Russian Federation, is in its second year of coordinated production cuts aimed at drawing on the surplus on the five-year average for inventories. "Demand for this year is expected to be good, if not better than 2017".

This is while OPEC natural gas liquids (NGLs) and non-conventional liquids output in January 2018 rose by 0.04 mb/d to average 6.48 mb/d. During the years of ultra-low oil prices after 2014 they canceled billions of scheduled investments. "But this proposal isn't final, and it's a work in progress", Bloomberg quoted Barkindo as saying. IP Week is recognized as one of the major worldwide oil and gas events, where senior leaders, policymakers and academics gather to share, learn and shape the future direction of the industry.

Adherence by the members with output targets rose to 137 per cent, according to a Reuters calculation, up from December.

US crude rose to $60.83 intraday, but closed up just 0.2% to $59.29 a barrel.

Brent tumbled 8.4 per cent last week, in the second consecutive weekly loss. "It will come back", Kuwaiti Oil Minister, Bakheet Al-Rashidi told reporters in Kuwait City. "The market is only expected to return to balance towards the end of this year", OPEC said, referring to the USA outlook.

Ready to get started? NLNG is producing 22 Million Metric Tonnes Per Annum (MMTPA) but we are not resting on our oars. "That is how we can survive the future with increasing appetite for renewable energy", Attah added.

Other reports by GizPress

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