OPEC announced last Friday that it will stick with its policy to produce oil at a high rate, a measure that may signal they are underestimating Bakken producers.
Related: OPEC Challenges Bakken Shale Drillers
If the measure by OPEC was meant to intimidate U.S. energy producers, they may want to try again. Despite this tactic to crush competitors, U.S. oil companies have worked to streamline operations an become more efficient. Many now claim they can remain profitable at the lower crude prices for some time.
“Lynn Helms, head of North Dakota’s Department of Mineral Resources says that “OPEC is still is our main competition. But what you’re seeing now is the Bakken becoming the swing producer, something that has happened relatively quickly because of efficiencies in drilling and completion technology.”
In response to OPEC’s announcement, oil prices fell on Monday and analysts project this will prolong the supply glut for the rest of the year. But despite forecasted demands and increasing supplies, OPEC said it expected that the world’s oversupply of crude will likely ease over the coming quarters and that U.S. production will decline in the third quarter.
Read more at opec.com