Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017 - Hallo friendsMY LIVE MY WAY, In the article you read this time with the title Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017, We have prepared this article for you to read and retrieve information therein. Hopefully the contents of postings Article my style, Article my way, Article New ways, Article their way, We write this you can understand. Alright, good read.

Title : Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017
link : Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017

Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017

I assume "everyone" includes IEA, OPEC, EIA, and HH.

Whatever.

The article is linked here. The writer's thesis: unlike conventional oil, it is incredibly difficult, if not impossible, to forecast future production of unconventional oil:

Forecasting output growth used to be a relatively simple undertaking. Developing oil fields had a lead time of several years and the flow of new oil coming from them was reasonably visible over a 12-month horizon.

Now, lead times are measured in weeks rather than years for new shale projects, and the large number of companies operating in the sector have made forecasting oil output growth almost impossible. The uncertainty makes it very difficult for OPEC and its friends to assess how they should respond. This raises a risk that they hesitate on extending the production reductions.

Analysts briefing the group last week said forecasts of growth in shale oil output next year ranged from 500,000 barrels a day to 1.7 million. That margin of uncertainty is as big as the entire output cut the group agreed to a year ago.

For me, this was the important takeaway:

OPEC should resist the temptation to delay a decision on extending its current output deal until the picture becomes clearer, because the situation isn't going to get any clearer. 

The widely differing assessments of this year's growth in shale output show that even by the first quarter of next year, there will be no unified view of 2018. 

OPEC's decades-old policy of acting as the world's swing producer has run out of steam -- at least so long as the U.S. shale sector is able to respond rapidly to movements in the oil price. 

Finally, we are getting away from the discussion of "swing producer" and now talking about "most responsive operator." It is now agreed that US shale operators are the most responsive to the price of oil. I remember not too long ago analysts suggesting it would take US shale operators up to six months, maybe a year to respond to prices; I always said operators could respond in days. Even this article says response is measured in weeks (now) instead months. I think one could argue US shale companies can respond in days instead of weeks. 

http://ift.tt/2dZyQXu

Thus Article Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017

That's an article Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017 This time, hopefully can give benefits to all of you. well, see you in posting other articles.

You are now reading the article Shale Is Confounding Everyone -- Bloomberg -- November 26, 2017 with the link address https://mylivemyidea.blogspot.com/2017/11/shale-is-confounding-everyone-bloomberg.html

Tweet

Subscribe to receive free email updates: