Richard Fischer, President, Dallas Federal Reserve, on February 11 said that OPEC engineered the drop in oil prices to put US oil producers out of business. However, Fisher is not the only one calling out OPEC for taking aim at US shale. Dan K. Eberhart, CEO of Canary LLC, picked up on this proactive action months ago.
During an interview on CNBC in early December last year, Eberhart said, “what’s shaping up is a battle royale between the US shale producers and OPEC. It’s a case of who’s going to blink first. I think OPEC, by deciding not to change their production quota, is betting on the US.”
Eberhart explained that OPEC is applying downward pressure on oil prices by significantly contributing to excess oil supplies during a period of lessened demand. The cartel has been exacerbating the price drop by charging the US less for its oil imports. OPEC is said to be fully aware that the lower prices go, the more difficult it becomes for US shale companies to recover the costs, and ultimately, to continue producing. Eberhart also commented on OPEC’s anti shale actions during a recent interview on CNNMoney about falling oil prices’ impact on North Dakota boomtowns in the Bakken shale play region.
Also, during his speech at OSEA on December 2, Eberhart warned guests that OPEC has had US shale in its sights since early fall, 2014. “In September, OPEC pumped more oil than it had during the previous 13 months, and until now has not been adhering to its own quota of 30 million bpd” and Eberhart added that OPEC’s battle with shale is heating up.
On February 13 it was reported that Eberhart said it is gratifying to see a respected leader like Fisher take the same stance. “I applaud Richard Fischer, not only for recognising what OPEC is trying to do, but also for his bold public remarks on the situation. This is a battle, but US shale producers are becoming increasingly more innovative and effective at drilling more for a lower cost. There’s every reason to be optimistic.”
Edited from press release by Claira Lloyd
Read the article online at: https://www.oilfieldtechnology.com/special-reports/16022015/opec-engineer-oil-crisis/