Surging U.S. oil supplies are increasing the nation’s influence in global crude markets while diminishing the power of the Organization of Petroleum Exporting Countries, according to Russia’s biggest oil producer, Bloomberg said June 17.
“OPEC has reduced its influence,” Igor Sechin, Chief Executive Officer of OAO Rosneft, said Wednesday in St. Petersburg. “The only market that has a full set of financial, technical and resource instruments is the U.S.”
U.S. output has surged to the highest level in more than four decades as a combination of horizontal drilling and hydraulic fracturing, or fracking, unlocks supplies from shale formations. OPEC is responding to the expansion by increasing its own supplies in a strategy to defend market share, breaking with a previous approach of curbing output to boost prices.
Operating costs are now the most important thing in determining oil prices, which will recover in two to three years, Sechin said.
While crude oil has rebounded from a six-year low in January, it remains 44 percent down from a year ago. Brent crude, the global benchmark, fell 56 cents to $63.13 at 5:01 p.m. local time on the London-based ICE Futures Europe exchange.
OPEC’s 12 members maintained their joint output target of 30 million barrels a day at a June 5 meeting. They’ve exceeded that level for the past 12 months.
Recommended Reading
US Drillers Cut Oil, Gas Rigs for Second Time in Three Weeks
2024-02-16 - Baker Hughes said U.S. oil rigs fell two to 497 this week, while gas rigs were unchanged at 121.
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
To Dawson: EOG, SM Energy, More Aim to Push Midland Heat Map North
2024-02-22 - SM Energy joined Birch Operations, EOG Resources and Callon Petroleum in applying the newest D&C intel to areas north of Midland and Martin counties.
Santos’ Pikka Phase 1 in Alaska to Deliver First Oil by 2026
2024-04-18 - Australia's Santos expects first oil to flow from the 80,000 bbl/d Pikka Phase 1 project in Alaska by 2026, diversifying Santos' portfolio and reducing geographic concentration risk.
Comstock Continues Wildcatting, Drops Two Legacy Haynesville Rigs
2024-02-15 - The operator is dropping two of five rigs in its legacy East Texas and northwestern Louisiana play and continuing two north of Houston.