A surprise drop in US crude inventories and comments from Organization of the Petroleum Exporting Countries (OPEC) Secretary General Mohammad Barkindo about lower-than-expected US shale production growth in 2020 boosted crude oil prices on 14 November.

Brent futures rose 80 cents, or 1.3%, to $63.17 per barrel, while US West Texas Intermediate (WTI) crude gained 64 cents, or 1.1%, to reach $57.77, Reuters reported.

Barkindo was quoted as saying on 14 November there would likely be downward revisions of supply going into 2020, especially from US shale, adding that some US shale oil firms see output growing by only 300,000-400,000 barrels per day.

Justin Urquhart Stewart, director at Seven Investment Management in London, told New Europe on 14 November that the cost of US shale production is still high. “They brought the cost down a little bit but to be profitable on it, it’s still very marginable,” he said. Urquhart Stewart said shale production in the US must be close to maximum at the moment “because all the easy stuff I think has already been addressed. I can’t see that there will be a huge increase in production from here.”


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