Despite Low Oil Prices, Kuwait Plans To Invest $42 Billion By 2022

Comments

• G. V. FOREMAN - 20th May 2016 at 7:52am:
  Well the Arab "cat" is out of the bag. The Kuwait’s oil minister “praised OPEC’s strategy for pushing out US shale as successful”. By default, OPEC was OK with US shale production as long as the oil stayed IN the US. However, in 2014, OPEC saw a concerted effort on the part of US oil producers and explorers to amend the 1975 Energy Policy and Conservation Act (EPCA) allowing for the unfettered, unregulated export of US crude. From OPEC’s standpoint the euphemistic gloves were and still off. It is not entirely ironic that within three to four months of their, US oil interest lobbying effort, global oil prices began their precipitous drop, August 2014, the source of which was attributed to a global oil glut. One, at least this one, can’t help but wonder if this was a matter of reality, of convenience or perhaps a bit of both. The reality, from OPEC’s standpoint, plays out like this: a “dear” friend, the US, which for 40 years wrote off the global oil market, is now exporting crude onto the global market introducing and volatilizing the global crude market. Resolution, from OPEC’s standpoint, “create” an oil glut on a global bases, resulting in decreasing oil prices to the point that US oil exploration, development and expansion, specifically horizontal fracking, would no longer be economically viable.
  Granted, the strategy is a two edged sword resulting in a loss revenue for OPEC members. However, the result for OPEC will be maintained market share simultaneously decimating the US fracking energy. From OPEC’s standpoint, the strategy was and is a “win-win” situation. For U.S. energy concerns, it is "back to the drawing board" and cut what "we" can, where "we" can, as much as "we" can, in order to maintain operations cash flow.