OPEC gambles that the United States shale's golden age is over, Bloomberg reported citing the sources in the organisation.
The OPEC minsters believe relentless U.S. oil production growth will slow rapidly next year. Oil traders and executives also believe U.S. production will grow less in 2020 than this year, and at a significantly slower rate than in 2018.
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, slower growth doesn’t mean no growth. While the independent companies which drove America’s shale expansion are struggling, and have announced big spending cuts, Big Oil is now playing a much bigger role in key basins. Companies with deeper pockets are likely to continue spending, the agency writes.
Perhaps the biggest problem for OPEC isn’t American shale but rising output elsewhere, especially in Brasilia and Norway.
