OPEC, for some quiet moments..

[admin]

At 8.8 million barrels a day, the U.S. is already pumping almost as much crude as two years ago, with just a third of the rigs it operated at the peak, data from Baker Hughes Inc. and the Energy Information Administration show. Since May, drillers have added about 200 rigs, taking advantage of rising prices as talk of an OPEC supply cut circulated.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

With OPEC’s oil revenues slumping to $518 billion last year from $956 billion in 2014, the group may have had little choice on the cutbacks. Even Saudi Arabia, the group’s biggest producer, has found itself burning through billions in cash reserves, slashing public-sector wages and tapping bond markets to plug a budget deficit.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

The biggest threat to OPEC’s plan could come from within. Nigeria and Libya got exemptions because conflicts in both countries damaged their output. If each nation reached its potential next year, then their additional barrels would almost wipe out the producer group’s supply cuts. Iran too didn’t have to make cuts from the same starting point as other OPEC countries. Several years of sanctions lowered its production and revenues from exports and the country argued that it needed the right to make up for that period. Another challenge could come from the dozens of U.S. drillers who survived the rout by becoming leaner and more efficient. After three years of turmoil, there are already signs of a rebirth in America’s shale fields as prices have risen and stabilized at around $50. If they jump by another $10, shale output that’s now at 4.5 million barrels a day could quickly rise by 500,000 barrels, Citigroup’s Morse wrote in a Dec. 22 research note.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

In the dying breaths of the year, the commodity price plunge claimed its latest victims as three energy companies outlined bankruptcy filing plans. Forbes Energy Services Ltd., Bonanza Creek Energy Inc. and Memorial Production Partners LP will use the U.S. courts to restructure their borrowings, each said Friday in regulatory filings. Bonanza and Memorial will give current shareholders some recovery of their investments, while Forbes said it plans to allocate them nothing and cede control to senior bondholders.

Trio of energy firms to start 2017 with bankruptcy