USA TODAY: …OPEC leaders will meet Thursday in Vienna to consider cutting output to shore up prices. The price of benchmark West Texas Intermediate crude has dropped more than 30% the past few months, from more than $100 a barrel this summer to $75 a barrel this week. The drop is attributed to increased oil production from North America, among other factors.
If OPEC doesn’t curb production, WTI crude is likely to drop into the $60 per barrel range and possibly lower. This will make it tougher for independent producers to launch new drilling projects in places like the Eagle Ford Shale in South Texas or the Bakken formation of North Dakota because they rely on high returns to finance the costly penetration and oil harvesting in those formations. If OPEC agrees to a cut, the crude could climb to $80 a barrel until production levels are confirmed early next year. The cartel would need to cut production by more than 1 million barrels a day to make any difference, analysts say…
Still, with U.S. production surging to record highs and global demand softening, OPEC’s relevance and power may be slipping and the group may be shifting its long-term goals. Bolstered by shale drilling in Texas and North Dakota, U.S. production surpassed 9 million barrels a day this month — the highest mark since the U.S. Energy Information Administration began reporting rates in 1983… (more)
