Last week OPEC, Russia and other oil-producing nations agreed to additional oil production cuts in an effort to support oil prices. Following the 177th Meeting of the OPEC Conference in Vienna, OPEC said it would increase its production cuts by another 500,000 barrels per day (BPD). Some shale producers did go bankrupt, and shale production temporarily fell, but most producers slashed costs and then continued to increase production. That will likely enable shale production to keep growing, which may force deeper production cuts (which was the case for OPEC this year). Thus, OPEC probably has a limited number of years in which it can successfully prop up oil prices.

Source: Forbes December 08, 2019 22:52 UTC