Opec can’t tame US shale oil producers

In trying to beat US shale oil producers, Opec has a serious fight on its hands. And it’s only going to get harder.

"It was all so simple," said Julian Lee on Bloomberg.In 2014, the oil exporters' cartel, Opec, decided to flood the market in order to put US shale drillers out of business and thus preserve market share. Late last year, following a fall in US production, it decided to cut output in order to bolster prices again.

But it turns out shale "is the wild horse Opec can't tame". Saudi Arabia, Opec's key producer, said when it introduced the supply curbs that it didn't expect much of a response from US production in 2017. In fact, overall US production jumped by over half a million barrels per day in the four months since Opec cut output.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.