quote:OPEC's Staring Down a Double-Barrel CutOPEC's numbers show the group needs to limit its total production to 30.88 million barrels a day from July to deplete the excess OECD inventory -- a decrease of 900,000 barrels a day from current levels. But with Libya and Nigeria, which are exempt from the supply-reduction deal, both restoring production after months-long disruptions, deeper cuts will be required still.If OPEC wants to drain surplus inventories by the end of the year, its members are going to have to accept some real pain. Even then, the risk is that their actions spur more supply from U.S. shale. It's time for some tough decisions
quote:U.S. Shale Roars Back at OPECThere are areas in the enormous Permian and Eagle Ford shale fields in Texas where producers can break even at prices as low as $34 a barrel, according to Bloomberg Intelligence.And analysts now say U.S. shale production will grow even faster than expected. Macquarie Group now thinks production will increase 1.4 million barrels a day through December, up from a previous growth estimate of 0.9 million barrels a day. JPMorgan Chase & Co. doubled its forecast to an increase of 800,000 barrels a day for the same period.It isn’t going to get a lot better for OPEC in 2018, either. JPMorgan is forecasting U.S. shale to grow by 1.05 million barrels a day next year, while Bank of America Merrill Lynch has a figure of 950,000 barrels a day.There are areas in the enormous Permian and Eagle Ford shale fields in Texas where producers can break even at prices as low as $34 a barrel, according to Bloomberg Intelligence.
quote:Saudi Arabia Says All ‘On Board’ to Extend Oil Cuts for 9 MonthsAll producers agree to extend crude output cuts by nine months to help trim a supply glut, according to Saudi Arabia’s energy minister.The producers, who together account for about half the world’s oil supply, have seen the initial price boost from their historic agreement fade as shale companies deployed more rigs and raised the country’s output to the highest since 2015.