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Crude Economics
OPEC Cuts Output, US Shale Rejoices
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  • Andrew Allison

    At a guess, the precipitous decline in the price of oil when it appeared that the Vienna meeting would not reduce production was threat of hanging which concentrated OPECs collective mind. Trouble is, as the Saudis have acknowledge, the USA is now the swing producer. There are two questions to be addressed: is a 4.5% (assuming that nobody cheats) cut enough, and how high will USA producers allow the price to go. It’s hard to imagine, absent a major interruption in supply, that the price will rise much above $50.

    • ljgude

      Nice little business you got there Sheikh. Shame if it got fracked……

  • https://www.youtube.com/watch?v=SBsvzKshKCw R. Arandas

    The United States honestly needs to become energy-independent as soon as possible; its reliance on the Middle East’s oil resources has always been one of its greatest and most dangerous weaknesses and vulnerabilities.

    • CapitalHawk

      Agreed. This, to my mind, is the strongest argument in favor of alternative energy (wind, solar, geothermal, biofuel). If the greens could get themselves to make this argument, they would be pleasantly surprised in the response, I think. But of course, they can’t bring themselves to say the words.

    • Proud Skeptic

      Actually, I think we are in a much better position just being the swing producer. All of these petro states have nothing to sell but oil. they MUST sell oil. We can control, to a great extent, how much they are able to charge.

      Seriously…this is as good as it gets!

  • Jacksonian_Libertarian

    Ready! Set! Cheat! *gets the popcorn*

    • CapitalHawk

      Surely none of the OPEC members will cheat on this. They are such a group of honest, corruption-free countries.

  • Kev

    Correct me if I’m wrong, but didn’t the reports say Indonesia or some other country left the OPEC and its output quota was “redistributed” among remaining members? If so we’re talking about reshuffling, and not an actual cut. Also the last time Russians made a deal with OPEC to cut output, they actually increased production in the next 6 months. Will be interesting to see how this works.

  • Proud Skeptic

    Message to OPEC…The 1970’s called and they want their oil policies back.

  • CaliforniaStark

    “Bakken is the most competitive of major U.S. shale plays.”

    Respectfully, have to disagree, think that Permian is the most competitive.

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