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Don’t look now, but OPEC is losing its ability to control the price of oil

collected by :Molly Tony

Many experts are saying OPEC is losing control of its ability to dictate oil prices, particularly in North America, as shale-oil production has become price-competitive with conventional oil.
Kloza’s title is Global Head of Energy Analysis with the Wall Township-based Oil Price Information Service – OPIS, for short.
I discussed this last week with a Jersey Shore guy who is a leading authority on oil prices, Tom Kloza.
Several years ago a lot of experts were projecting that we had reached the stage of “peak oil” production.
And Donald Trump’s got another trick up his sleeve that could really upset OPEC, Kloza said.

as informed in

OPEC oil output cuts are ‘backfiring’

But the higher prices not only made more U.S. production profitable, it also gave drillers the opportunity to hedge their production.
U.S. drillers are insulating themselves against falling oil prices — a move that could prolong the global crude glut that the Organization of the Petroleum Exporting Countries is trying to drain.
American companies rushed to lock in higher prices for future deliveries of oil as the market recovered late last year, analysis of company disclosures by consultancy group Wood Mackenzie shows.
Hedging involves buying financial instruments that give producers the option to sell their oil at an agreed-upon future price.
At this point in the year, 33 of the largest American oil producers have 26 percent of their output hedged, compared with 24 percent and 23 percent of production in 2016 and 2015, respectively.

OPEC compliance with oil curbs rises in March as UAE joins cut: survey

as informed in Lower output in Nigeria and Libya, which are exempt from the curbs, helped bring overall OPEC production down.
The Libyan and Nigerian reductions mean OPEC output in March has averaged 32.01 million bpd, about 260,000 bpd above its supply target adjusted to remove Indonesia.
The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data, and information provided by sources at oil companies, OPEC and consulting firms.
OPEC wants to end a glut that is keeping oil LCOc1 below $52 a barrel, half the level of mid-2014.
Compliance of 95 percent is higher than OPEC achieved in its last cut in 2009, Reuters surveys show.

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