Opec's 'capitulation' leaves obstacles for US shale drillers

New York

THE Organization of the Petroleum Exporting Countries (Opec) finally blinked in its two-year price war with US oil producers. Whether that translates into a financial victory for the American shale industry remains to be seen.

Oil prices and the shares of US drillers kept climbing on Friday, two days after Opec promised its first production cut in eight years. The US companies will need oil to hold above US$50 a barrel for months before they commit to more spending, according to analysts at firms including S&P Global Platts and Oppenheimer & Co.

Opec's surprise announcement still represented a "capitulation" to drillers in US shale basins, which proved much harder to eliminate than their opponents expected, said Katherine Richard, CEO of Warwick E…