Saudis tell U.S. oil: OPEC won't extend cuts to offset shale
Senior Saudi energy officials told top independent U.S. oil firms at a closed-door meeting this week that they should not assume OPEC would extend output curbs to offset rising production from U.S. shale fields, industry sources said on Thursday. "One of the advisors said that OPEC would not take the hit for the rise in U.S. shale production," a U.S. executive who was at the meeting said. "He said we and other shale producers should not automatically assume OPEC will extend the cuts." Saudi Arabia's Minister of Energy, Khalid al-Falih, said at an industry conference in the U.S. on Tuesday that there would be no "free rides" for U.S. shale producers benefiting from the upturn. Saudis and Russia led a deal to curb output in late 2016 to end a global supply glut that pushed oil prices to a 12-year low, and the resulting rise in oil prices has sparked a rush of new output by shale producers, who this week outlined ambitious production growth plans across the United States. The U.S. government expects U.S. oil output to rise 330,000 bpd in 2017, mostly from shale, but some analysts and producers are forecasting the increase could be more than double that amount. OPEC next meets on 25 May in Vienna to discuss supply policy, and is expected to decide there on whether to extend supply curbs implemented on 1 January.
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