OPEC + ministers believe that the “golden age of US shale oil production is over, Bloomberg reported.
“OPEC isn’t alone. Across the industry, oil traders and executives believe U.S. production will grow less in 2020 than this year, and at a significantly slower rate than in 2018. On paper, the cartel has the oil market under control,” the source noted. “Vitol Group, the world’s largest independent oil trader, expects U.S. production to increase by 700,000 barrels a day from December 2019 to December 2020, compared to growth of 1.1 million barrels a day from the end of 2018 to the end of 2019.”
However, a slowdown does not mean its absence. While US independent shale oil companies are announcing cost cuts, major players are likely to continue to increase their production, Bloomberg notes.
The biggest problem for OPEC countries is not American shale oil, but the overall increase in black gold production in countries such as Brazil and Norway, the agency noted. The agreement of OPEC and some states outside the organization (OPEC +) on the reduction of oil production has been in force since the beginning of 2017. Its action has been repeatedly extended and the conditions have been changed.
The agreement provides for a reduction in production by 1.2 million barrels per day from the level of October 2018, 228 thousand barrels of which are in Russia, and is valid until the end of March 2020.
The next meeting of representatives of OPEC + states, where the issue of extending the agreements should be discussed, is scheduled for December 5-6.