While American’s were celebrating their Thanks Giving last month, OPEC was meeting in Vienna figuring out a way to derail the US latest oil boom of unconventional drilling. Led by Saudi Arabia, the OPEC plan was to not cut oil production and this would then squeeze the US out the market. What is actually happening, the market has taken control of the price and is putting the squeeze on many OPEC nations that cannot operate at a $60 cost per barrel. The large US supplies have no intention of slowing down production as they tired of OPEC dictating their future. Now OPEC finds it’s self for the first time not controlling the market. This is music to the US oil producers, as we’ll see in the new year OPEC backing off and oil prices bouncing back to the $75 – $85 a barrel in mid-2015.
Eagle Ford Shale, one of most successful oil shale plays in the US, just produced their billionth barrels of oil last month has no intention of slowing down. Oil prices may be dropping but the big US oil producers have no plans to slow down operations in Eagle Ford Shale. Karnes County –Eagle Ford Shale the most successful drilling area is producing 1000 to 1500
The good news is OPEC will end up folding their cards by cutting production, as the US producers know very well not to play into the hands of OPEC. It’s time for the US to take back control and not back down by slowing down production.barrels per day and even at $40 a barrel the oil stakeholders can make money all day long. The cost for the oil producers to shut down or slow down operations is far more costly than riding out the storm for the next 6 months and wait for the market to come back to the $75 – $85 range.
Writer: Stan Sprenger operates Eagle Ford Village in Eagle Ford Shale and is in close contact with many of the large oil producers. Dec 12 2014