OPEC Plan Now Seen as Success as IEA Forecasts Dropping U.S. Oil Production

By -
From CNN Money:
The Saudi-led cartel's master plan to pump record amounts of oil in order to squeeze other producers out of the market appears to be working. 
"The strategy...appears to be having the intended effect of driving out costly, 'inefficient' production," the International Energy Agency said Friday in its monthly oil market report. The IEA monitors energy market trends for the world's richest nations. 
The agency said OPEC's rivals such as the U.S. and Russia will see the biggest decline in oil output next year since the collapse of the Soviet Union. 
Non-OPEC production will drop by nearly 500,000 barrels a day in 2016, the agency said. It singled out the U.S. shale oil industry as the biggest loser, forecasting that output will fall by 400,000 barrels a day next year. 
By contrast, demand for OPEC oil is expected to rise.
Continue reading that article here.

The Wall Street Journal also took a look at the implications of the IEA forecast, and came to a similar conclusion:
The agencies's predictions are among the gloomiest for American oil production to emerge since US crude prices crashed last month to less than $ 40 a barrel for the first time since the financial crisis, before recovering to about $ 45 a barrel. But US government forecasters this week also predicted a sharp drop in American oil output over the coming 12 months, before beginning to rebound next fall. 
With the rise of hydraulic fracturing techniques to extract crude from shale formations in recent years, the US had become one of the world's top three oil producers, along with Saudi Arabia and Russia. Newly low oil prices present challenges to US producers who had shown unexpected Resiliency when the market collapsed last year, the IEA said. 
"US oil production is likely to bear the brunt," said the Paris-based agency, which advises some of the world's largest oil consumers. 
And the IEA noted that any US decline could give OPEC-led by Saudi Arabia, the world's largest crude exporter-more leverage over the market in 2016. The producer group may boost its output next year as a result, the IEA said.
Read that whole article by clicking here. 

Connect with us on Facebook and Twitter!

Popular posts from this blog

Fracktivist in Dimock Releases Carefully Edited Video, Refuses to Release the Rest

By -
Image
From Energy in Depth: There is something very strange going on along Carter Road, in Dimock, Pennsylvania, and I’m not speaking of natural gas, methane migration, contamination, litigation or even the extensive water testing there by the EPA and others.  No, I’m talking about a new “Watergate” conspiracy, complete with 18 minutes of missing tape (well, video, actually). It seems the ever-present Green Party member and  naturist   Vera Scroggins  (a/k/a  Vera Duerga ) has posted a video of Craig Sautner meeting with the EPA.  Mysteriously, the video is but 14 seconds in length, cutting off conversation in what is obviously mid-stream.  It raises a question Craig Sautner, like  Ronald Reagan in Kings Row , might have asked, “Where’s the rest of me?’  Carter Road, isn’t Kings Row, of course, (at least not until you arrive at  the mansion Scott Ely, one of the Dimock litigants, is building with his royalty money ), but there appears to be...
Read more

The Second Largest Oil and Gas Merger - Cabot and Cimarex

By -
Image
       Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money.      That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector.      The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest.       The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividen...
Read more

Do You Know The History of Fracking?

By -
Image
  In 2018, 59% of total oil production in the U.S came from hydraulic fracking, which means it accounted for more than two-thirds of domestically manufactured gas. By 2024, fracking will reach an astounding $68 billion market value! Of course, fracking is not a new drilling method as you can trace it back hundreds of years. That's why we want to consider the history of hydraulic fracturing (fracking). We will be stating historical facts about it and focusing on the major historical occurrences that have influenced modern-day fracking. Pre-Fracking Days The idea of fracking started back in 1862 when Edward A.L. Roberts (Civil War veteran) witnessed Confederate soldiers exploding artillery rounds into a canal that obstructed a battlefield. At the time, Edward A.L. Roberts called it superincumbent fluid tamping. On April 26th, 1865, Edward A.L. Roberts began experimenting with exploding torpedoes, which consisted of lowering a torpedo containing an amount of powder from fifteen to tw...
Read more