On today's Odd Lots podcast, we speak with our Bloomberg Opinion columnist Javier Blas about what's going on the industry. There's a few interesting dynamics here that we touch on.
One is the tech story. Shale itself exists as an industry because of tech. But the tech keeps getting better. Even with tighter financial conditions, producers are still getting better and better at getting more oil out of each well. The industry has also gotten better at standardizing parts, allowing operators to work more efficiently.
Meanwhile, US shale is putting massive pressure on OPEC, with Saudi Arabia recently having undertaken a unilateral production cut in order to put a floor under prices.
It's quite a massive story and the question is how long these set of conditions can last. But at least for the moment, we're seeing high volumes, cheaper gasoline prices, profitable US players, and pressure on OPEC. Quite a combo.
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