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OPEC Hands Shale a Victory, But Cracks Remain

Friday, October 7 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. OPEC’s gift to the oil industry

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- OPEC’s decision to cut its collective production by somewhere between 200,000 and 700,000 barrels per day caused oil prices to spike by 6 percent.
- That led to huge gains for the energy industry. The combined market cap of the 10 largest U.S. oil and gas companies surged by $36 billion on the day the OPEC deal was announced.
- ExxonMobil (NYSE: XOM) alone saw its value rise by $15 billion.
- Notice in Bloomberg’s chart that Valero (NYSE: VLO) did not gain on the news. The downstream sector is not exactly enthusiastic about higher oil prices, which could eat into their margins.

2. Nigeria could spoil OPEC’s party

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- Nigeria was exempted from OPEC’s production limits due to the huge losses to its oil sector this year from militant attacks.
- Nigeria’s oil production dropped by about 800,000 barrels per day between late 2015 and this past summer, falling to a 22-year low of about 1.4 million barrels per day.
- But the frequency of attacks has slowed as the Niger Delta Avengers have remained mostly…

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