There have been great matchups in the world. You had Alien versus Predator. You had King Kong versus Godzilla. But no matchup in recent memory might prove to be as interesting as Trump versus OPEC. OPEC still stunned and angry about President Donald Trump waivers on Iranian oil exports was moving in on a deal to cut production by at least 1.4 million barrels a day. The President called out OPEC and tweeted that “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” causing oil to give up its gains, that were already tenuous, with a soaring U.S. dollar that hit its highest level since June and a faltering stock market. This epic battle helped oil crash yet again, setting a record for consecutive down days and raising concerns about what this says about the state of the global economy and the impact on U.S. oil producers. Will OPEC give in to the President’s tweet and back off a production cut or will they defy the President and send him a signal that he does not own OPEC? Let the battle begin.
U.S. oil producers can’t be too happy with President Trump’s tweets. While the President realizes that low oil prices are good for the economy, too low of a price may hurt U.S. economic growth. The U.S. energy industry is a big part of the U.S. economy and the world is really looking to us to supply the globe over the next few years.
In fact, in today’s report from the International Energy Agency(IEA), the IEA said its main projection scenario through to 2040 foresees the U.S. accounting for nearly 75% and 40% of global oil and gas growth, respectively, over the next six years. Growth is expected to be driven primarily by shale fracking, which should lead U.S. shale oil supply to more than double, reaching 9.2 million barrels a day by the mid-2020s. “The shale revolution continues to shake up oil and gas supply, enabling the U.S. to pull away from the rest of the field as the world’s largest oil and gas producer,” said the Paris-based organization that advises governments and corporations on energy trends. “By 2025, nearly every fifth barrel of oil and every fourth cubic meter of gas in the world come from the United States.” As reported by the Wall Street Journal.
