Fidelity bank banner Bayelsa State banner
Global oil players flock to Houston as OPEC, U.S. shale tensions ease

By Ernest Scheyder on 05/03/2018

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 869


The oil industry’s biggest names gather this week at CERAWeek, the largest energy industry get-together in the Americas, at a time when U.S. shale production is booming, global demand is rising and crude prices are at a sweet spot for both big U.S. producers and OPEC.

Last year’s decision by the Organization of the Petroleum Exporting Countries to restrain output has drained the global glut that occupied much of the conversation at 2017’s gathering. With oil prices up about 15 percent since oil ministers and top executives convened here last year, fears have receded for a slugfest of OPEC vs. U.S. shale.

Rising prices have U.S. shale producers pumping more, sending total U.S. output to an all-time record above 10 million barrels per day. This year, the United States could surpass Russia as the world’s largest oil producer.

OPEC, meanwhile, has shown no signs of moving to produce more, with output from members at a 10-month low. The cartel’s leaders have even expressed interest in keeping some production curbs in place through 2019.

Oil ministers and their advisers will use the conference to put shale under a microscope, said Dan Yergin, vice chairman of conference organiser IHS Markit and a Pulitzer Prize-winning oil historian.

“OPEC is still really struggling to understand: ‘What is this new oil business called shale?’” said Yergin. “This conference is a field trip for OPEC to a different reality in oil.”

They have scheduled dinners with shale executives and financiers for the second time in two years, underscoring the maturation of a relationship between big petrostates and a once-upstart industry that weathered OPEC’s best efforts to bury it under a supply glut from 2014 to 2016.

Shale has emerged stronger from that period with the Permian Basin, the largest U.S. oilfield, now producing nearly 3 million barrels of oil per day, triple that of 2009. Presentations will look at shale’s rising role in global markets and the potential for future North American production and export growth.

“The Permian is just now coming into its own,” said Randy Foutch, chief executive officer of shale producer Laredo Petroleum Inc, which plans to boost output 10 percent this year. “We no longer have to find oil and gas. We’ve found it, and will pump it.”

OPEC says it wants to encourage moderation by shale companies as well as its own members. Shale firms often use hedges, or financial contracts that lock in a price for future production, to guarantee profits. These contracts protect them should prices slip.

“We all should look with responsibility to the market in order to keep the balance in the market as much as we can so as not to harm investors,” said Ali Nazar, Iraq’s national representative to OPEC.

OPEC views shale as a monolith rather than a collection of independent companies, and hopes executives will say they will keep U.S. output under 10 million barrels per day. But the organisation also recognises shale producers would be violating U.S. antitrust law if they agreed to collective pricing or output pacts, one OPEC source told Reuters.

The U.S. Energy Information Administration said on Tuesday it expects domestic oil production to surpass 11 million barrels per day late this year.

ELECTRIC CARS & BIG DATA

Global oil industry players are also concerned about threats from renewable energy technologies and rapid changes to the automobile industry. Majors including BP Plc have forecast that gasoline use will decline as electric vehicle usage grows.

General Motors Co Chief Executive Officer Mary Barra, in her first visit to the oil conference, is expected to detail plans by the largest U.S. automaker to launch 20 new electric vehicles by 2023.

Exxon Mobil Corp and others have said they expect rising petrochemical and aviation fuel demand to offset a drop in demand for liquid fuels such as gasoline.

The oil industry is also funding research into big-data, cloud computing and applying new technology to its operations to cut costs and boost production. In a sign of that convergence, the head of Alphabet Inc’s Google Cloud division also will attend the conference.

“The U.S. shale industry has turned out to be amazingly innovative and it’s like open-source software, with everyone experimenting and learning from one another,” said Yergin. (Reuters)

Source News Express

Posted 05/03/2018 11:03:44 AM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
Kwara youths protest attempt to implicate Saraki in...

Violence in a Rebased Economy, By OLUSEGUN ADENIYI...

Amaechi appointed board member of UN Road Safety...

Monkeypox detected in Kano

$3 billion spent on oil exploration in north...

BREAKING NEWS: Gunmen kidnap Ex-Minister, husband

Campaign of calumny against Ex-Governor Uduaghan senseless -...

Breaking News: Chime, lawmakers at war over N11B...

EFCC disowns Maina at House Committee sitting •Makes...

South African lawmakers okay compulsory land acquisition for...

BREAKING: Suspected Badoo Cult Leader, Chief Herbalist captured...

Children’s Day: UNICEF calls for an end to...

 

Latest News 2019: Ambode offered ‘big federal job’ to abandon governorship bid Woman sells baby to raise money for Christmas Delta community petitions Buhari over Army’s refusal to return occupied land Leadership tussle tears Enugu APC apart Disease outbreak looms as floods spread National Assembly passes another amended version of Electoral Act Amendment Bill Buhari, 87 other Presidents to address 73rd Session of United Nations General Assembly Over 100,000 cases pending in Federal High Court, CJ reveals Ohanaeze seeks to promote Igbo language in Lagos 1.3bn people at risk of tuberculosis — WHO Flood: Obiano summons emergency meeting of stakeholders Enelamah calls for active collaboration between private sector and government

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (394,291 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (375,617 views) Shameless Genevieve Nnaji exposes breasts in public (307,112 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (249,753 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (231,257 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (221,115 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (199,214 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (180,833 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (164,915 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (162,910 views) Lagos plane crash: Journalist releases victims’ names (157,570 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (146,459 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (62) Business & Economy (3,608) Business Verdict (51) Columnists (927) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (546) Features (651) Global Business Monitor (299) International (2,407) Interview (164) Live Commentary (28) Love Matters (143) News (38,968) Opinion (1,105) Pidgin (11) Politics (6,626) Religion (866) Sports (1,693) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

I am Imo State's New Governor -- Okorocha's son-in-law Uche Nwosu...

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement