Oil fell on Tues, extending losses from previous session
inexorable rise in U.S. crude output weighed on markets
U.S. (WTI) crude at US$61.25 a barrel
Brent crude at $64.85 per barrel
Both crude benchmarks dropped 1% Monday
Oil prices fell on concerns of surging U.S. production
U.S. production soared past 10 million (bpd) late 2017 overtaking Saudi
U.S. production > 11 million bpd by late 2018
taking top spot from Russia
rising U.S. output from onshore shale oil production.
U.S. shale expected to rise by 131,000 bpd in April
record 6.95 million bpd
Oil prices lower after report that production from 7 major U.S. shale players climb
My comments: Note two things here - US shale oil is located on the ground. NOT under the sea. They can access the oil easily.
The cost of producing shale oil is still going down because it is a function of evolving technology. Different oil companies have proprietary technologies which give them cost advantages. They are all going to beat the production costs of the OPEC producers.
OPEC's cost of production is constantly rising. This is the problem for OPEC. And for countries that extract oil and gas from under the sea - like Malaysia.
You can run away into your cocoon but you cannot run away from the forces and the laws of economics.
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