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OPEC and Crude

With OPEC’s announced reduction in crude production, it might be good to take the long view. Below is chart of crude prices since 1985.  The period between 2005 and today has seen a revival of the US oil industry. Companies have now bet that they can make money at $50/bbl, at least in the Permian. While significant, OPEC’s announced reduction (1) has not yet been realized and (2) is a small percentage of total world oil production.  If drilling rigs return to the field in the numbers present in 2008-2014, Opec’s reduction can easily be made up by increased production from US fields. (click on charts to enlarge)

 

EIA crude pricesEIA crude production

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