Did OPEC Just Admit Defeat In The Shale Oil Wars?

 | Nov 13, 2017 00:38

Key Points:

  • OPEC quietly admits that its Shale Oil Strategy has failed.
  • ULCC static off Oman since 2015 offloads oil.
  • Imagery suggests Saudi Arabia could be fudging their inventory storage numbers.

The past week has been relatively interesting on the Crude Oil news front as OPEC quietly released their `’World Oil Outlook’ report. As usual, the cartel largely shrugged off the growing risk around the arrival of peak oil demand and largely painted a picture of improving price stability.

However, what was particularly illuminating is the fact that the cartel drastically revised upward their assessment of U.S. shale oil production. Subsequently, the question remains if OPEC is finally ready to admit defeat in their strategy to crush shale oil producers.

Surprisingly, it was only just last year that OPEC was pushing the narrative that shale oil production would be damaged by their strategy of flooding the markets with cheap oil. In fact, the cartel was almost smug in their view that shale production would continue to fall and by 2021 represent only 4.8 mb/d.