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OPEC’s Problem: There Is No Minister of Shale
Keywords:
Greg Ip points out that Saudi Arabia's effort to get back market share is not working so far as shale oil producers continue to increase production. OPEC now confronts a very different competitor in the U.S. shale oil industry- 77 different producers produce 75% of American oil production, each acting like a tech startup, with access to capital markets which are continuing to provide capital. These producers can increase or reduce production with agility, and act differently from state owned oil producers or the major western oil companies. He cites Goldman Sachs figures showing average rig in Texas Eagle Ford shale yielding 5000 barrels a day in the first year compared to 2000 barrels in 2011. This analysis also shows shale oil production cost on a declining curve- $80 in 2014 and $60 in 2015, which could upset Saudi calculations with the advances in technology. Majors such as ExxonMobil are also moving forward with the technological advances.
OPEC policy and oil prices- 2013-2018
11/30/2013
Grouped Articles
OPEC Rift Emerging Over Iraq Output, Possible Return of Iran
Wall Street Journal 11/30/2013
OPEC, Foreseeing No Glut, Keeps Oil Production Level Steady
New York Times 12/04/2013
Venezuela Could Force Oil Market to Take Stock
Wall Street Journal 02/24/2014
Oil Prices Continue Decline, Pressured by Saudi Action to Defend Market Share
New York Times 10/02/2014
OPEC Members’ Discord Adds to Slide in Oil Prices
Wall Street Journal 10/04/2014
Oil Markets Fly Into a Perfect Storm
Wall Street Journal 10/09/2014
OPEC's loss of pricing power in 2015
06/01/2015
Saudi Arabia acting as a swing producer adjusted oil production to keep prices from falling in the period before 2015. Following the sharp drop in oil prices to below $50 in early 2015, prices steadied to about $65 for Brent crude in June 2015. The Saudi oil minister Naimi says he takes the long view on oil prices, and decides to continue Saudi production at earlier levels in June 2015. In a period of declining oil prices the Saudis and OPEC continue to produce oil at the same levels as before.
Grouped Articles
OPEC’s Pricing Leverage Is Weakening
Wall Street Journal 06/01/2015
OPEC’s Problem: There Is No Minister of Shale
Wall Street Journal 06/03/2015
Wall Street Journal 06/05/2015
OPEC, Keeping Quotas Intact, Adjusts to Oil’s New Normal
New York Times 06/05/2015
As Saudis Keep Pumping, Thirst for Domestic Oil Swells
Wall Street Journal 07/04/2015
U.S. Oil Prices Hit Fresh Six-Year Low, Dipping Below $40 a Barrel
Wall Street Journal 08/23/2015
Exxon and learning "to get the oil out of the rock in the most cost efficient way" - declining costs of shale oil production and the future for oil prices 2015-2020
03/06/2015
Grouped Articles
Exxon Mobil: Shale to the Chief
Wall Street Journal 03/06/2015
U.S. Producers Ready New Oil Wave
Wall Street Journal 03/14/2015
Non-U.S. Shales Prove Difficult to Crack
Wall Street Journal 03/19/2015
OPEC’s Problem: There Is No Minister of Shale
Wall Street Journal 06/03/2015
Two Years Into Oil Slump, U.S. Shale Firms Are Ready to Pump More
WSJ 09/27/2016
How American Shale Drillers Flipped OPEC’s Script
WSJ 05/24/2017
U.S. shale oil production and the oil price decline in 2014-2015
10/23/2014
Grouped Articles
The Oil Price Swoon Won’t Stop the Shale Boom
Wall Street Journal 10/23/2014
Refining Saudi Arabia’s Oil Strategy
Wall Street Journal 11/03/2014
Oil Prices Slip Further After IEA Report
Wall Street Journal 12/12/2014
How Crude Oil’s Global Collapse Unfolded
Wall Street Journal 12/14/2014
Wall Street Journal 01/06/2015
Oil’s Fall Continues Into 2015, and Stock Markets Shudder
New York Times 01/05/2015
How new technologies and shale oil changed a world of $150 per barrel upside down- predictions of $150 a barrel by IEA for 2015 in 2007
05/22/2008
Forecasting is a difficult business. New technologies can turn any business upside down. In 2007 the IEA predicted a huge shortfall in oil supplies to meet demand and surging prices over $150 a barrel, as outlined by Neil King in the WSJ that year. Oil supplier countries that depended on ever higher prices face severe economic crisis with oil prices at $50 a barrel in 2015.
Grouped Articles
Energy Watchdog Warns Of Oil-Production Crunch
Wall Street Journal 05/22/2008
Wall Street Journal 12/12/2011
OPEC’s Problem: There Is No Minister of Shale
Wall Street Journal 06/03/2015
OPEC supply, oil demand and oil prices 2014-2017
10/15/2014
Grouped Articles
IEA Cuts Outlook for Oil-Demand Growth by 22%
Wall Street Journal 10/15/2014
Refining Saudi Arabia’s Oil Strategy
Wall Street Journal 11/03/2014
OPEC Members Nearing Compromise on Supply Cuts
Wall Street Journal 11/26/2014
Energy Quakes as OPEC Stands Pat
Wall Street Journal 11/28/2014
Iraq Agrees on Kurdistan Oil Deal
Wall Street Journal 12/02/2014
Saudi Arabia Sees Oil Prices Stabilizing Around $60 a Barrel
Wall Street Journal 12/04/2014
The calculations of the Saudis, Russia, Iran and Iraq, Venezuela, and other OPEC members as oil prices decline in Oct.-Dec. 2014
10/15/2014
Each side the Saudis, the Russia, and Iran is looking at the drop in oil prices and how much it can absorb using sovereign reserves as lower prices leads to budget deficits in 2015-2016. Russia and Iran face greater problems with western sanctions, and falling currency values exacerbating rising inflation. Other OPEC countries such as Venezuela and Nigeria face a crisis from falling revenues. In the U.S. this will affect shale oil production as less efficient producers shut down plants, with the overall outlook of lower oil prices being positive.
Grouped Articles
Fall in Oil Prices Poses a Problem for Russia, Iraq and Others
New York Times 10/15/2014
The Oil Price Swoon Won’t Stop the Shale Boom
Wall Street Journal 10/23/2014
As Oil Prices Plummet, Saudi Arabia Faces a Test of Strategy
New York Times 10/15/2014
Refining Saudi Arabia’s Oil Strategy
Wall Street Journal 11/03/2014
Saudi Price Cut Upends Oil Market
Wall Street Journal 11/04/2014
OPEC Members Nearing Compromise on Supply Cuts
Wall Street Journal 11/26/2014
Saudi price strategy in 2015 and U.S. shale oil drillers
01/10/2015
Grouped Articles
Saudi Arabia’s Cure for Shale Could Entail Shock Therapy
Wall Street Journal 01/10/2015
The new economics of oil: Sheikhs v shale
Economist 01/13/2015
Back to the Future? Oil Replays 1980s Bust
Wall Street Journal 01/14/2015
New King in Saudi Arabia Unlikely to Alter Oil Policy
New York Times 01/23/2015
Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth
Wall Street Journal 02/20/2015
Shale-Oil Producers Ready to Raise Output
Wall Street Journal 05/14/2015
The Economist and WSJ on shale oil, the Saudis and oil prices in 2015 and beyond
01/13/2015
The Economist points out that shale oil production technology is at the early stages with production costs likely to come down from an average of $57 a barrel. With the relatively small costs to start drilling in shale deposits and extensive new shale deposits in the U.S. and other parts of the world, shale is likely to remain a factor in oil production and prices for a long time. Any impact of Saudi oil price cuts on shale oil production is likely to be temporary, as new advances in the technology and efficiency will make shale oil a serious source of oil supplies. Already some efficient shale oil producers have costs below $35 a barrel in the U.S., according to the CEO of CSX Railroad. CSX has dropped the fuel surcharge to improve the competitiveness of shale transported by rail from the Bakken shale region in N. Dakota.
Grouped Articles
The new economics of oil: Sheikhs v shale
Economist 01/13/2015
Back to the Future? Oil Replays 1980s Bust
Wall Street Journal 01/14/2015
New King in Saudi Arabia Unlikely to Alter Oil Policy
New York Times 01/23/2015
Exxon Mobil: Shale to the Chief
Wall Street Journal 03/06/2015
U.S. Producers Ready New Oil Wave
Wall Street Journal 03/14/2015
Shale-Oil Producers Ready to Raise Output
Wall Street Journal 05/14/2015
U.S. shale oil producers confounding Saudi price strategy- (1) 77 U.S. companies acting like tech startups with access to capital markets
03/14/2015
Linked Articles
OPEC’s Problem: There Is No Minister of Shale
Wall Street Journal 06/03/2015
U.S. Producers Ready New Oil Wave
Wall Street Journal 03/14/2015
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