A brilliant move by U.S. shale oil producers has given them a great hedge. How long it can hold is anyone’s guess as OPEC is sure to try and counter it. The good news is that the U.S. remains one step ahead.
Since OPEC announced the production cut deal at the end of November, industry analysts have been warning that rising production from producers outside the deal—U.S. shale in particular—is effectively capping the oil price gains from that agreement.
Four months after the OPEC/NOPEC deal took effect, oil prices dropped to the levels preceding the agreement, amid concerns over still stubbornly high inventories and rising U.S. output.