Two landmark events this month will underscore the extent to which the oil market's balance of power has been transformed by the shale revolution, according to analyst John Kemp.
John Kemp is a Reuters market analyst. The views expressed are his own
LONDON, June 1 (Reuters) - Two landmark events this month will underscore the extent to which the oil market's balance of power has been transformed by the shale revolution.
In Washington, Congress will begin considering legislation to permit the export of crude oil from the United States, reversing a four decade ban put in place after the first oil crisis in 1973/74.
In Vienna, the Organization of the Petroleum Exporting Countries (OPEC) is expected to roll over its crude production target of 30 million barrels per day (bpd) even though prices have fallen more than 40 percent over the last 12 months.
Rather than reduce production to boost prices, Saudi Arabia and the other OPEC members are prepared to continue pumping to defend market share and maximise revenue.
After 40 years when OPEC appeared to play the dominant role balancing supply and demand and influencing prices (sometimes successfully, sometimes not), power has passed to the shale drillers of North America.
Now it is the shale drillers who must decide whether to respond to the recent price rebound by re-activating rigs and completing more wells, at the risk of sending the price tumbling again.
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