OPEC Extended Cuts Could Spike Oil Prices

Members of OPEC and Russia are meeting in Vienna to extend production cuts amid uncertainty how U.S. shale production will respond next year.

The shale revolution has turned the U.S. into a major player in the global oil market in recent years, forcing OPEC hand moving forward.

“The risk is that OPEC does too much, they cut back too far and can't catch up, and then we see a price spike in oil that could actually derail the economic recovery,” says Phil Flynn, vice president and senior energy analyst at PFGBEST.

Flynn says that could put shale producers in a pinch.

“I think OPEC is going to have a difficult time raising production fast enough when the time comes to keep up with global demand,” he says.  “And I think shale producers will benefit, but they're going to have a hard time keeping up with demand as well.”

 “Maybe five or ten years down the road, we're going to feel the lack of investment that was put into the energy industry, we're going to say what were we thinking when oil prices were $25 a barrel, why didn't we buy every barrel we could get our hands on?”

Sponsored Content

Sponsored Content