OPEC’s Problem: There Is No Minister of Shale
When Saudi Arabia launched a global oil-price war last year, most market players assumed America’s high-cost, financially fragile shale producers would be first to retreat. Some retreat. American companies have been quick to idle rigs and lay off workers, but U.S. onshore oil production has gone up since last fall, not down. As oil ministers from member countries of the Organization of Petroleum Exporting Countries meet this week, they are grappling with the fact that the world’s new swing producer is a very different animal from their traditional competitors. Shale-oil companies have more in common with the technology startups of Silicon Valley than the big, often state-controlled, integrated oil companies that dominate global oil markets. They are smaller, more nimble, take more risks and are more tied to the ebb and flow of the capital markets. This agility has enabled them to boost productivity, raise cash, and so far […]