‘We’ll be on Our Toes to Respond to U.S. Shale’: Al-Falih

Related Articles

Indian Refiner BPCL to Boost Oil Processing Capacity

17 hours ago

Goldman Sachs: Huge Spare Capacity Weighs on Oil Prices

19 hours ago

Russian Tanker Sinks in Black Sea Spilling 4,300 Tonnes of Oil

3 days ago

OPEC and its 10 allies acknowledge the potential variables in the world oil market. such as U.S. shale growth. but will be “very agile“ to react and respond depending on how events unfold. the president of Thursday’s OPEC conference and Saudi Arabia’s oil minister. Khalid Al-Falih. said Thursday.
The official said the group is “extremely assured. optimistic“ for oil in the short and medium term. with investments flowing back sooner than later.
He expects a “very bullish“ 2018 and sees shale as a “small-to-moderate“ challenge in the coming year. Kallanish Energy reports.
Speaking at a press conference in Vienna. Al-Falih said “we don’t believe that shale can nearly carry the role“ of offsetting declines such as the ones happening in the North Sea. Mexico. China and OPEC-producing countries.
“I don’t think we should overreact based on one year. There was a lot of fear-mongering about shale in 2017 and we’ve seen that not happening.“ he said. “The contribution of shale in 2017 will approach at year end is going to be very much manageable. quite moderate.“
Al-Falih expects the impact of U.S. shale on the markets in 2018 will not be significantly different from that in 2017. “Yes. there is going to be more drilling and perhaps more completions. but then you have higher declines as the base of shale increases. So we will see … and continue to monitor the market to see what happens.“ he said.
Asked about an exit strategy to the oil curb deal extended until December 2018 (see related story). the official said it was “premature“ to design such a strategy. Markets will be entering a softer period in terms of demand in the next three to four months. he said. noting that Q2 and Q3 2018 will be key to the consideration of an exit.
A technical team will be asked to design a gradual exit strategy. so supply comes back gradually and doesn’t cause a glut any time soon. Al-Falih said. The adjustments and allocations per country will be decided then.