 The big oil glut: U.S. shale revolution and OPEC countermovesRiccardo Cristadoro, Virginia Di Nino and Laura Painelli () No 296, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Abstract: Last year�s slump in oil prices reflected deteriorating expectations for demand in 2014 and 2015 as well as higher-than-expected production levels in the US combined with OPEC�s decision in November to maintain its market share instead of cutting oil production to absorb the excess supply. OPEC�s decision to give up its role of �marginal producer� shows that the �shale revolution� triggered a structural change in the geopolitics of oil. The pick-up in prices in the first part of 2015 occurred amid tensions in the Middle East, Ukraine and Africa and growing uncertainty about OPEC�s future strategy and the resilience of non-conventional oil production now that prices are far below the levels that sustained its growth. The upswing in economic growth caused by declining prices has, however, been interpreted with a degree of caution, because the fall in prices also reflects lower demand. Moreover, in many areas, low inflation carries the risk of unwanted increases in real interest rates, should expectations of a further decrease gain currency. Keywords: oil price; shale oil; geopolitics of oil (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_296_15 Access Statistics for this paper More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC. |
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