The consensus view that crude oil prices will range around $60 a barrel in coming years, with flexible US shale oil acting as a “swing producer” to prevent spikes, is comforting.
Neither the oil industry nor governments, consumers and investors have enjoyed the return of boom-bust oil prices over the last 15 years.
But $60 is no more likely to be a “new normal” than $100 was thought to be five years ago.
Recent history, shale’s intrinsic attributes, and looming supply and demand trends strongly suggest shale oil is likelier to contribute to price instability than dampen it.
It is crucial to distinguish between short cycle and swing production.
Short cycle shale production ebbs and flows faster than conventional oil production — quarters instead of years.
But US shale production is comprised of many dozens of highly idiosyncratic public and private companies, each competing with each other to maximise reserves and production.
Shale’s shorter cycle ebb and flow can stabilise prices, but only coincidentally and depending on prevailing, broader market fundamentals.
For instance, shale oil’s galloping arrival after 2010 was fortuitous, coming just in time to offset a tightening market — exacerbated by the disruption of Libyan supplies — and helping cap oil prices around $100 a barrel.
But three years later, shale’s relentless growth contributed to oil’s shocking bust from $100 to below $30 after Opec producers declined to accommodate shale by cutting their production.
この記事は Dhaka Courier の March 2, 2018 版に掲載されています。
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この記事は Dhaka Courier の March 2, 2018 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
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