Is OPEC+ Going To Play Nice??


(Bloomberg) -- Saudi Arabia’s energy minister has no quarrels with U.S. shale and even sees output cuts by OPEC and its allies as directly aiding American drillers. “The action we have taken, quickly in December and that we’re seeing implemented as we speak, is a lifeline to U.S. shale producers,” Khalid Al-Falih said at a conference in Abu Dhabi.

Many operators in the U.S. shale patch “call me when they see the price band drop down and they see investors starting to turn away, and they say it’s time to do something,” Al-Falih said. “They want us to do all of the work and they want to take the benefit, but that’s, you know, that’s life.” Prices are up more than 20 percent since hitting an almost two-year low in December. Although higher oil is a boon to U.S. shale producers, Al-Falih said he isn’t convinced that the frackers will “sustainably suppress the market.” Output in the U.S. helps tame prices and reduce volatility, which is one of the ultimate aims of the OPEC+ initiative, he said. U.A.E. Energy Minister Suhail Al Mazrouei sees a risk that shale drillers may overproduce again, and any excess supply from shale deposits could take a long time to clear, he said at the conference. OPEC+ cuts of 1.2 million barrels a day are enough, Mazrouei said.

Edited by cbrasher1

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