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OPEC targeted US oil producers but hurt itself in the process

OPEC targeted US oil producers but hurt itself in the process

Imagine a tug of war lasting three years and waged across the entire globe that leaves both contenders scared and wobbly but stationary. That is one way of picturing the current competition involving the world’s giant oil exporters and the companies that drill in American shale fields.
The continued contention for the top of the 97-million-barrel-per-day planet’s market has left a scorecard which few members of the oil patch had even envisioned. Just three year ago, things on the global oil market appeared far m
uch different than they are today. It is hard for members of the oil patch to find a match between the two global oil markets. They recall a time when oil was $100 per barrel, a situation which has been reversed today following the supply glut which left oil prices oscillating between$488 and $50.
Following the onset of summer’s driving season, it is customary for oil prices to be on the rise. But, the exact converse is taking place on the ground. Both oil and gas prices have tumbled over the past 2 weeks. This is mainly attributed to the continued increase in the quantities of oil stored by US and overseas inventories. There are two major players worthy of consideration.
The Organization of Oil Producing Countries has a hand in this. Its attempts to prevent oil prices from being in free fall again have failed, despite switching between many tactics. Its challenge is to curb the supply glut which has been responsible for the continued volatility of oil and gas market prices.
On the other side is the group of companies that are working round the clock to tap from Shale Reserves in the states in the US, of which the state of Texas is in the lead. They have managed to survive any attempts to obliterate shale production. Nonetheless, they are still staggering thanks to the crippled crude oil prices which have made it impossible for struggling oil companies to make profits.
As things stand, over 123 companies have whose operations are based in North America have filled for bankruptcy since the year 2015 began. Even the likes of Exxon Mobil and Chevron that survived, have witnessed the fall of their share prices. Companies like these which have still continued to be in existence despite the horrors of the oil market have had to survive on borrowing. But, they have not been able to prevent the loss of jobs that has characterized the job market in the oil sector of the US. Recently, over 150, 000 employees had lost their jobs in the US alone. But, the job market has since shown signs of recovery.
“Both sides have suffered one twist after another,” said Daniel Yergin, who is the historian and vice chairman of HIS Markit, a firm which specializes in energy consultancy and research. He was referring to the organization of Oil Producing Countries and the struggling group of companies which are two major entities of the oil market.

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