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Saudi Energy Minister Khalid Al-Falih walks with Malaysian Prime Minister Najib Razak during the Asia Oil and Gas Conference, Kuala Lumpur, Malaysia, May 8, 2017 (AP photo by Daniel Chan).

How OPEC Lost the Battle Against U.S. Shale, Again

Wednesday, May 24, 2017

Oil markets are expecting the Organization of the Petroleum Exporting Countries (OPEC) and its allies to extend their supply quotas when they meet in Vienna on Thursday. The current production cuts have failed to drain bloated oil inventories due to a remarkable resurgence in U.S. shale production. Keeping production down will not be easy for the coalition of 24 oil producers, 11 of which are not in OPEC. Even if fully implemented, an extension of the deal will likely just prevent oil prices from falling, while giving more market share to U.S. shale.

It seems that OPEC has lost the battle against shale, again. Since the dramatic fall in world oil prices in 2014, OPEC has fought two unsuccessful battles against American shale producers. ...

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