for Shale Oil
Despite continued rapid growth in U.S. shale, the global oil market could see price spikes and increased volatility at the beginning of next decade.
Exxon and other oil majors are still giving the green light to a handful of complex and risky but potentially highly profitable projects offshore, while at the same time increasingly shifting more resources into safer, smaller-scale shale drilling.
While U.S. crude production hasn’t fully recovered, it has increased by more than 300,000 b/d since September to average just under 9 million barrels per day. As a result, the OPEC-fueled boom in prices has stalled for the time being.
Under the border-adjustment tax, U.S. oil would be exempted from taxes if it is exported abroad, making it much more competitive. The tax, however, will have difficulty passing in Congress since it would also likely raise pump prices.
The OPEC commission would examine whether the cartel’s behavior is designed to disadvantage U.S. oil producers and secure market power through anti-competitive behavior.
After two years of seeing spending contract, the oil industry is poised to boost capex in 2017, but some warn that may not be enough to keep a shortfall from occurring in the future.
OPEC agrees to its first production cut in eight years, reminding the market of its enormous power, but the ultimate impact of the cartel's action is far from certain.
A major consultancy says that the oil market will still take longer to rebalance than many analysts had reckoned because of supply-side trends both in OPEC and outside the group. A slew of new non-OPEC fields will ramp up to increase the global crude oversupply to a massive 1.8 mbd for 1H 2017.
Rather than focus on midstream infrastructure, environmentalists should focus their energy on reducing oil demand if they want to reduce consumption.
The Permian has weathered the downturn in prices better than other shale plays, and prospects there are improving even more with prices firming after OPEC's decision to cut output.