Who is Really Responsible For Low Oil Prices? The Answer May Surprise You
But while U.S. supply exploded, global demand only grew by 2.119 million barrels per day between 2012 and 2014. The U.S. and Canada alone essentially created the oversupplied oil market we see today, not OPEC.
OPEC's perceptual problem really stems from the fact that it let prices stay as high as they did for so long. That brought new competition to the market from outside the cartel. That's one reason it didn't step in to save oil prices last summer.
OPEC isn't the problem
Remember that the reason oil prices dropped last summer wasn't that OPEC started to flood the market with oil, it was that OPEC didn't cut production to offset rising U.S. production, as it might have done in the past. OPEC actually kept oil production flat in 2014 at 30.1 million barrels per day.
Even in 2015 as Saudi Arabia has increased production slightly to keep pressure on shale producers, OPEC is only expected to increase production by 0.8 million barrels per day. That's even less than the expected 1.17 million barrel per day increase in global demand.
Things aren't always what they appear
OPEC gets a lot of blame for falling oil prices, and it certainly plays a role. But if your energy stocks have been dropping like a rock and you're looking for someone to blame, the real villain might be right here at home. Without exploding shale production, the oil markets wouldn't be oversupplied right now -- and that's the U.S.'s fault, not OPEC's.
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