OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says

by
November 28, 2014

OPEC policy on crude production will ensure a crash in the U.S. shale industry, a Russian oil tycoon said.

The Organization of Petroleum Exporting Countries kept output targets unchanged at a meeting in Vienna today even after this year’s slump in the oil price caused by surging supply from U.S shale fields.

American producers risk becoming victims of their own success. At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable for some explorers, Leonid Fedun, vice president and board member at OAO Lukoil (LKOD), said in an interview in London.

2 Comments - what are your thoughts?

  • fastfood says:

    Yet when we dump product to force out competition it’s unfair, illegal and criminalized. Gee, I wonder why UNCLE Sam hasn’t got the b@lls to block “unfair” competition from OPEC? Could it be our Big Brother government is in OPEC’s hip pocket, or worse?

    1. I Seigel says:

      What should “UNCLE Sam” do? Force OPEC to raise their prices? These are market forces at work, my friend. If you don’t like it, then you’re a commie-fascist who wants Big Government to step in and control everything.
      Maybe US producers shouldn’t be pulling all the oil out of the ground as quickly as possible, lowering their own prices, too. Maybe they should cut back a little and conserve their resources, let the prices go up so that they can all make money. They’re shooting THEMSELVES in the foot. But that would take cooperation and a long-term strategy, not something that conservatives are good at. The Saudis, on the other hand, seem to be better at a long-term strategy. Then again, the oil industry there is controlled by the state – by the ruling families – and not by individual companies. So, in this case at least, centralized control is working better for them.

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