OPEC Is Freaking Out About America's Shale Boom

Rob Wile | May 28, 2013, 11:22 AM | 7,991 |

America's shale boom is sending shockwaves through OPEC as the organization heads for its annual meeting Friday, The Wall Street Journal reports this morning.

The main concern is that a global supply glut will weigh down prices, which would be a big problem for petrostate budgets.

From the WSJ:

While Saudi Arabia can tolerate lower prices, "there will be some members, like Venezuela, Iran who will struggle at $90," said Amrita Sen, chief oil analyst at London-based Energy Aspects Ltd. The front month Brent contract for July settled at $102.62 a barrel Monday. Venezuela's oil minister said on Monday that he would push for a cut in OPEC production if oil falls below $100 a barrel.

We've previously shown how falling prices is a concern in the following graph of break-even oil prices for those countries' budgets.

Pacifica Partners

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