The OPEC is concerned that their American rivals producing shale oil may catch at the chance given them by the OPEC+ deal. The deal is aimed to cap oil production and restore the market balance in favor of higher oil prices. The OPEC+ agreement is likely to be extended during the forthcoming OPEC summit on November 30th in Vienna, Austria.
At the same time, international experts make controversial predictions regarding the prospects of the American shale oil production in 2018. Some of them shared their concerns during the briefing in Vienna – Andy Hall, who is known as “god” for making shockingly accurate forecasts, Amrita Sen, chief oil analyst for Energy Aspects, Per Magnus, chief analyst for Rystad Energy, as well as analysts from Citigroup Inc., Morgan Stanley, and other major banks.
The experts claim that the precision of their 2018 predictions for the U.S. shale oil production, as well as Brent and WTI production, will influence the period for which the OPEC+ deal is going to be extended. For now, Saudi Arabia and Russia are advocating the idea of extending the OPEC+ deal until the end of 2018. However, the participants with less substantial amounts of daily oil production are afraid that this period is too long, especially as American shale oil companies may rapidly increase their production and drop oil prices in an instance.
For now, shale oil production forecasts vary from 500K b/d all the way up to 1,7 million b/d. Andy Hall claims that the U.S. Department of Energy has no idea how high the oil production may go. For example, they have underestimated the local shale oil production by 300K b/d this year. Per Magnus recollected Marianna Cox’s words about the American phenomenon, which is all about a rapid expansion of shale oil production thanks to cutting-edge technologies still unavailable in other parts of the world. According the EIA, American shale oil companies produced a record-high 9,66 million barrels over the past week.
