Scott Darling, head of regional oil and gas at JPMorgan, discusses the extension of OPEC’s production cuts, and where he sees prices heading. He speaks on “Bloomberg Daybreak: Asia.”
A deal has been struck at OPEC to extend production curbs until end of 2018, but the US reports a surge in domestic production which in September reached a high of 9.48 million barrels a day, the 4th highest monthly levels since the 1970s. So will the production cuts be blunted?
“At $60 WTI prices, where we are now today, shale could produce 1 million barrels per day into 2018 and beyond,” says Darling.
“We are seeing a gradual rebalancing of the oil markets, but after the euphoria of the cuts, prices should start to go down again at the start of the New Year.”
Darling said that Shale oil production won’t be stalled unless oil prices reaches the $30s but a recent study has shown that there are more productivity gains to be had in shale.