24/02/2018 by Mark
The Paris-based International Energy Agency (IEA) has warned in its latest monthly report that US shale producers may thwart OPEC’s goal of reducing global inventories to the five-year average, just as it is close to achieving it.
Shale operators like ExxonMobil, which also makes industrial lubricants like Mobilgear 600 XP 460 under its Mobil brand, have cut shale production costs dramatically. The IEA argues that this has led to a second period of growth for US shale, but this time the growth is so dramatic that increased US production alone may meet the additional global demand anticipated by the IEA for 2018.
It says:
“This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share.”
The IEA also warns that the situation is reminiscent of the events leading to the 2014 oil price crash, to which the US shale oil revolution was a contributor. Led by Saudi Arabia, OPEC originally responded by continuing unrestricted production in the hope that lower oil prices would force expensive fracking operations out of the market. While this did lead to many companies filing for bankruptcy, the industry ultimately survived and became more efficient as a result.
The agency points out that while inventories are now only 52 million barrels above OPEC’s target, compared with 264 million barrels at the start of 2017, ongoing growth in US shale production may trigger a reversal in this trend over the coming months.
You may also interested in:
When should you replace industrial oil vs top it up?
Effective lubricant use is critical for operations using machinery in industrial applications.
Petronas and Petrobras sign contract for Brazilian oil fields
State-funded Malaysian oil and gas company, Petronas, recently completed a new transaction with Petrobras, the Brazilian oil major.