U.S. Tight Oil E&Ps, OPEC Struggling for Supremacy, Says BP

June 15, 2018

Natural gas production, which climbed worldwide by 3% in 2017, provided the single largest contribution to primary energy growth, but the showdown between U.S. tight oil producers and the Organization of the Petroleum Exporting Countries (OPEC) continued to bring the drama last year.

BP plc on Wednesday unveiled the 67th annual BP Statistical Review of World Energy, outlining highlights during a webcast from London. Chief economist Spencer Dale, accompanied by Group CEO Bob Dudley, offered insight on longer term trends and shorter term developments affecting all things energy-related, as well as carbon emissions trends. BP also for the first time offered an analysis of the global power markets.

Dale, who led the audience through the overview, centered a big chunk of his commentary around the oil markets, noting that when last year's BP review was published, flows of oil production and consumption had come broadly back into balance, but inventories were at record-high levels.

"OPEC, together with 10 non-OPEC countries led by Russia -- sometimes known as the Vienna group -- had begun to implement their promised cuts in oil production in order to accelerate the adjustment in inventories," he said. "But U.S. tight oil had started to pick up, threatening to offset the impact of the production cuts."

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