Latest News
- Non-oil Exports Of Kuwait Reached 106 Million Dinars In January,...
- Kuwait Joins The Global Celebration Of World Press Freedom Day
- Kuwaitis In UAE Advised To Exercise Caution Amid Unstable Weathe...
- MEW Has No Plans For Power Cuts And Is Ready To Tackle The Summe...
- Allow Employees To Transfer If Their Monthly Dues Are Not Paid
- Appeal Court Upholds Death Ruling In Friend’s Kill
- Pakistani Expat Died In A Tragic Accident
- The Hourly Domestic Workers Service Is A New Scam
- Kuwait Will Experience Moderately Hot Weather Over The Weekend
- No Additional Side Effects Found Of COVID-19 Vaccines In Kuwait
- Kuwait, Oman Sign A Nurse Training Agreement
- Saudi Arabia And Kuwait Share The Durra Field
‘shale Producers Grateful To Opec’
THE US shale oil producers should indeed be grateful to OPEC for raising the oil price to above $73 a barrel for the US crude oil. OPEC and partners had helped in bringing the oil price to such a level that USA producers are now relaxed, making money, curtailing production or not in hurry to increase its rig numbers. They are enjoying the party with their own shareholders generating profit and inflow of cash to such an extent that they are not bothered to look or monitor the oil prices. They are even ignoring the OPEC-Plus’ outcomes.
One year ago, they were on the brink of bankruptcy, and today they are doing nothing but ploughing cash dollars. The oil organization adopted its own strategy of reducing production by more than nine million barrels and waited patiently to dry out all of the excess oil in the storage tanks and let the oil market carry out its own tricks. They left the decision in the hands of OPEC-Plus and its own timing. Surprisingly, all members had fully adhered, and one of them sacrificed millions of barrels in order for the price to move gradually to its current level of $ 75 and more. Today’s oil price is at a comfortable level. However, it raises some questions as to what level it should be before inflation starts to affect the gains. Would consumers start raising their voices? Such a decision may take longer time under today’s concerns in terms of the COVID-19 variants, which could curtail oil demand and economic growth.
The other OPEC concern is Iran and how soon it will come into the market and give room to the new fresh volume as well as its impact on the oil market. Will the volume be more than two million or less per day? Since oil supply discipline is the only factor that OPEC-Plus thinks about day and night, this would be their nightmare. Meanwhile, the USA shale oil sector is not in a hurry to do anything and not bothered… It is collecting cash and is ready for distribution to its owners. The number of new rigs is 200 as compared to a height of 1,600 in 2016. Now they only follow OPEC-Plus and are most likely cooperating also with the organization indirectly.
In the future, they may attend OPEC as an observant! None of us expected such an increase in the oil price in such a short time. No one expected the full adherence of OPEC-Plus members led by Saudi Arabia to achieving such results, as one member had sacrificed to ensure smooth and gradual increase in the value of the barrel. Will $80 per barrel be the breaking factor maybe by the end of the year? Would shale oil producers reward OPEC by staying on the sidelines?
SOURCE : ARAB TIMES
Trending News
-
Expat Residency Law Amended By Kuwait Ministerial...
20 April 2024
-
Ministry Announces Separate Time For Amnesty Seeke...
21 April 2024
-
The Ministry Connects With Violators Of Residency...
23 April 2024
-
Two Expats Are Arrested For Stealing From Salmiya...
17 April 2024
-
Work Permits Will Be Issued For One Year Under The...
27 April 2024
-
AstraZeneca Admits Covid Vaccine Can Cause Rare Si...
29 April 2024
-
3 Expats Caught In Salmiya With 213 Bottles Of Loc...
23 April 2024
-
Temperature Increases Cause Electricity Load Index...
21 April 2024
-
Al-Nuer Festival Celebrates Kuwaiti Agriculture Wi...
22 April 2024
-
Peak-time 'cut-offs' Raise Fears Of An Electricity...
22 April 2024
Comments Post Comment