Opec+ faces a new problem – a Texas gas pipeline
The new path to market for Permian Basin shale gas could foil oil producers’ plan to curb output
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NOW is the moment when common sense says the US shale industry should be slowing. With oil prices plunging 25 per cent over the last year, you would expect companies to react by cutting drilling. Yet American oil output growth is about to re-accelerate.
The burst of activity would come at an awful time for the Organization of the Petroleum Exporting Countries and its allies (Opec+). Saudi Arabia and Russia – which lead the oil cartel – are already wrestling with an oversupplied market, particularly in early 2025.
The reason why US crude production would apparently defy the cyclical nature of the commodity market has little to do with supply or demand for oil itself. Instead, it is all about natural gas.
