US shale producers rival OPEC
LONDON, May 29, 2015 – According to OPEC’s latest long-term strategy report released to Reuters, the US’ rate of production surpassing the producer group. The report further stated that the oil glut could last for another two years.
This long-term strategic report comes ahead of next week’s OPEC policy meeting in Vienna. Non-OPEC members will continue to grow in terms of production until 2017, particularly the shale boom in the United States.
Brent crude has collapsed from $115 a barrel in June 2014 to today’s $62. This has been a direct result of the US shale boom contributing an extra 4.5 million barrels of oil per day, flooding the market.
“Generally speaking, for non-OPEC fields already in production, even a severe low price environment will not result in production cuts, since high-cost producers will always seek to cover a part of their operating costs,” the OPEC report stated.
OPEC’s forecasted crude will be cut to 28.2 million in 2017 from 30 million barrels of oil per day in 2014. While its current level stands at 31 million barrels of oil per day, the group could either cut down its output or ride the storm of low oil prices.