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OPEC'S ENERGY WAR WITH U.S. DRAWS BLOOD

Cartel seeks to crush American industry, oil at 12-year lows

Douglas Ernst

OPEC’S war of attrition with the U.S. energy industry continues to draw blood.

Saudi Arabia’s increased oil output is testing the resiliency of U.S. companies as prices per barrel hover around 12-year lows.

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Almost 18 months of falling prices has forced non-OPEC supplies to contract by 660,000 barrels a day this year, above previous estimates of just 270,000, the Telegraph reported Monday.

The Times of London reported on Monday that OPEC was “on the verge of claiming victory” in light of low prices and U.S. crude futures closing down 96 cents at $28.46.

Ryan Lance, chief executive officer of ConocoPhillips, told an OPEC conference in June that U.S. shale and natural gas producers would withstand the cartel’s painful tactics.

“[Shale oil] is here to stay,” Lance said in Vienna, Austria, June 4, 2015. “The shale industry is like a sprinter, very agile. They run, they win, they stop and rest, and they do it again.”

Robert McNally, president of oil consultant Rapidan Group in Washington, echoed that sentiment.

“We are in the early innings of a long game,” McNally said June 4, Bloomberg reported.

American oil output soared in recent years to 14 million barrels per day as a result of fracking technology and natural gas finds. Saudi Arabia is the world’s second-largest oil exporter at 11.6 million barrels per day.

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Conoco said over the summer that U.S. shale could see returns of 10 percent with oil prices as low as $40 a barrel. OPEC’s ability to keep prices per barrel in the mid-20s will test U.S. shale’s endurance.

Oil prices are at lows not seen since 2004 (Photo: Bloomberg)

Adding the the oil war’s complexity is the return of Iran to the market with the lifting of U.S. sanctions, as well as a mild winter.

“The oil market faces the prospect of a third successive year when supply will exceed demand by 1 million barrels per day and there will be enormous strain on the ability of the oil system to absorb it efficiently,” the The International Energy Agency said Tuesday, CNBC reported.

Iran’s stated goal is to increase its oil output by 500,000 barrels per day.

Read more at http://www.wnd.com/2016/01/opecs-energy-war-with-u-s-draws-blood/#R4ddTRtloKUWV3wJ.99