Lower global production costs, considerable U.S. shale growth potential and shale's ability to quickly respond to changing market conditions should keep average annual oil prices below USD60 a barrel in the long term, Fitch Ratings says. But oil prices will remain volatile and could periodically exceed our assumptions.So relatively low fuel prices should continue, keeping more money into the U.S. economy.
We remain sceptical about the effectiveness of OPEC's production cuts to rebalance supply and demand in the near term, as well as to materially reduce crude stocks given the exclusion of Libya and Nigeria (both producing at higher levels since the cut), weak enforceability, and poor track records of adherence. OPEC's average compliance rate slipped to 75% in July from almost 100% at the beginning of the year, according to the International Energy Agency. It improved to 82% in August, but overall we expect average compliance rates in 2H17 and beyond to be weaker than in 1H17.
But more good news from the Oil and Gas Journal of Oct 9, 2017, reporting on remarks by Interior Secretary Zinke commenting on efforts to help U.S. oil and gas producers:
“Regulations should be ground in science—not a political agenda,” the secretary indicated. “This is why we’re reviewing and possibly revoking rules that are overly punitive. We’re trying to find the quickest way to get to ‘yes’ without sacrificing our environmental and other responsibilities. With our joint model, we’ll make sure that agencies from many parts of the federal government can work together and involve states, tribes, and other stakeholders earlier in the process.”There is an interesting issue that lurks behind efforts to reduce or ban the use of petroleum powered vehicles- well posed by BOb Tippee of the Oil and Gas Journal:
Zinke said that more federal oil and gas resource development will improve US security and provide more jobs and economic growth. “I don’t want to see our country held hostage by a foreign oil producer or US troops sent into combat to protect supply routes,” he maintained. “Every drop of US oil that’s produced supplants one from Iran. That’s effective leverage.”
The greenest means of efficient and large elecrical power generation is nuclear, not wind or geothermal or solar or water current.
See Electric Cars Are Not Necessarily Clean: Your battery-powered vehicle is only as green as your electricity supplier and Electric car growth sparks environmental concerns: Mining of raw materials and recycling of lithium-ion batteries in spotlight.
Of course, if the goal is reducing CO2, I guess other types of environmental concerns melt away.