For years the mantra for the progressives on both sides was we can’t drill our way out. But we did. And then some. US Oil and natural gas production aren’t just fueling our economy with stable energy prices, it is changing the politics of oil. And even OPEC is starting to notice.
Related: The U.S. Posts First Full Month as a Net Exporter of Crude Oil Since 1949
I’ve been playing this tune for a few years. Fracking can power the economy, ensure a steady and strong domestic energy source in support of national defense, and put the screws to the oil-nations that hate us.
It has added both mobility and leverage in Middle East politics. We don’t need wars for oil, we have our own. Sure OPEC thinks it is still a big deal, just not as big as it once was. And they are beginning to realize that. And the Wuhan Flu is partly responsible.
The outbreak has oil-producing nations worried that it will reduce global consumption and suppress prices. I assume they mean ships not docking to unload cargo in infected ports in China or other parts of Asia. To prop the price up, OPEC could agree to more production cuts. But they did than late last year to no measurable benefits.
Prices barely moved, then moved lower.
The problem is producers outside OPEC. With vase reserves being uncovered peak oil is a fantasy that has been pushed out into the next century. Cheap energy boosts economies so nations that are not solely or mostly dependent on energy revenues can keep producing and filling any gap created by reductions from OPEC nations.
“I have to say this delicately, but OPEC, I think, is starting to realize that even though they cut back, try to balance output and stabilize prices, they have less influence.”
“That is simply because the balance of power has shifted,” Driscoll said, citing “massive new fields” in Norway, Brazil and Guyana.
“And, of course, the U.S. being the biggest non-OPEC producer. (With) all of this excess supply, if OPEC cuts back, they might lose market share and that gap could be filled by a non-OPEC producer,” Driscoll said.
If OPEC can’t manipulate the price through supply cuts what point is there to being in OPEC?
It would be hard for me to imagine a world without OPEC not being a better place.
| CNBC
