Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering
The Oil & Gas Hub
Special Designed Oilfield Tally Book – Try Now
  • Main
  • News
  • Photo
  • Video
  • Oilfield Jobs
  • Learning Section
  • Oil & Gas Calculator

OPEC to U.S.: Please don't pump so much oil!

2017.05.12
4 385

The unusual plea was issued Thursday in the cartel's closely-watched monthly report, which found that global markets are still suffering from too much supply.

 

The report said that balancing the market would "require the collective efforts of all oil producers" and should be done "not only for the benefit of the individual countries, but also for the general prosperity of the world economy."

OPEC said that one producer in particular is to blame: The U.S., where shale producers have continued to ramp up their drilling despite lower crude prices.

The increased production has undermined OPEC's efforts to keep prices between $50 and $60 per barrel.

OPEC and allied producers agreed in November to slash production, a move designed to rid global markets of excess supply. For a while, the strategy appeared to be working, with prices drifting north of $54 earlier this year.

Now, the magic appears to be wearing off.

The cartel has responded to the sharp decline in prices by suggesting that the agreement could be extended far beyond its original mid-year deadline.

But that won't help OPEC solve its American problem. The U.S. did not join its agreement, and the number of rigs in operation there has doubled over the past year.

"I think [OPEC] are now acutely aware that they don't have the kind of influence they used to have 10 years ago, and that shale is now the swing producer in the market," Tom Pugh, commodities economist at Capital Economics, said last week.

The cartel has in the past fought fiercely for its market share. Starting in 2014, it pumped relentlessly in order to squeeze higher cost American producers.

The strategy pushed prices well below $30 per barrel and forced many U.S. producers to scale back in 2015 and 2016.

But it had a disastrous effect on the government budgets of OPEC members, forcing them to implement austerity measures.

It also forced U.S. producers to become more efficient, and they can now withstand much lower prices than just a few years ago. Analysts at UBS estimate that U.S. producers can now make money as long as prices remain above $40 per barrel, down from $65 in early 2014.

Related Posts

What the Beetaloo Basin Signals About the Next Phase of Unconventional Gas in Australia
2026.04.14
28
What the Beetaloo Basin Signals About the Next Phase of Unconventional Gas in Australia
Australia’s gas story is changing. The focus has moved away from exploration alone toward what…
Weekly Energy Digest - March 30, 2026
2026.03.30
232
Weekly Energy Digest - March 30, 2026
Oil prices remain high amid the ongoing war in the Middle East, following a volatile week with some…
Weekly Energy Digest - March 24, 2026
2026.03.25
475
Weekly Energy Digest - March 24, 2026
Oil benchmarks hit four-year highs this week as the war choked off Hormuz transit flows. The IEA lau…
Oil and Gas Consulting in the Clean Energy Transition: Strategies for Resilience
2025.12.10
994
Oil and Gas Consulting in the Clean Energy Transition: Strategies for Resilience
Build resilience in the energy transition with expert oil and gas consulting strategies for operatio…
Market quotes are powered by TradingView.com
© Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering, 2026
ADVERTISE  | Contact Us  | Privacy Policy  
Made in studio Zuber