Atheer – External Sources
A group of shale executives and OPEC officials met in Houston on Monday, however failed to discuss the topic of oil prices and OPEC output levels, as such a broad conversation would run afoul of US antitrust rules against price-fixing.
According to Reuters, Tim Dove, CEO of Pioneer Natural Resources Co, said “it was quite a congenial group of people. We had a really wonderful conversation.”
He noted that Mohammed Barkindo, OPEC secretary general, gave a speech in which “his main message was that they believe very strongly that demand is going to be significant moving forward in terms of growth.”
Only a year-and-a-half ago the two sides were involved in a price war that left many shale firms bankrupt. OPEC pumped all-out from 2014, pushing down the oil price in a campaign for market share aimed at pushing the shale industry out of business.
The price war sparked an industry recession, and oil prices CLc1 LCOc1 plunged to a low of $27 a barrel. Shale however cut costs and survived and eventually the low price was too much for OPEC members to bear. Since then, there has been an uneasy truce between OPEC and the shale industry.
US firms cannot engage in agreements to control supply or push up prices, due to anti-trust laws in the United States. Yet shale firms are enjoying the benefits of OPEC members doing what they cannot, driving US production to a record in late 2017 at more than ten million barrels per day.
Occasionally, OPEC ministers show signs of their frustration. Nigerian Oil Minister Emmanuel Ibe Kachikwu told Reuters on Monday that “some of the same companies that are working in shale are the same companies working in OPEC,” adding that they should “take some responsibilities in terms of stability of oil prices.”
Along with Barkindo, ministers from Qatar, the United Arab Emirates and Equatorial Guinea were in attendance.