5 Energy Stories That Made Headlines in 2017


2017 was an interesting year for the energy world. We saw WTI shoot from $50 to over $60 a barrel and Brent hit $65, much to OPEC’s delight. But, 2017 bore witness to more than just oil price fluctuations – here are the most popular stories from 2017.
The Oil War Is Definitely Not Over Yet
When OPEC and Russia announced their pact to cut oil production, it made headlines all over the world. However, after the initial glory and accompanying price spike, doubters began to emerge wondering whether some members of the pact might cheat. This was soon overshadowed by a much bigger concern – U.S. shale gas production was on the rise and rising rapidly. Although OPEC publicly denounced the hype around shale production, by the end of the year it was obvious that it was going to threaten the success of the production agreement.
The USA’s Next Big Shale Play
The Permian held the spotlight for the majority of 2017 but in June, drilling productivity reported by the EIA showed that the Powder River Basin may well knock the Permian off the top spot. Given that shale was a huge focus of 2017, anything that concerned it was top news. By the end of 2017 the Bakken was lagging way behind the Permian in terms of production growth despite forecasts by the EIA that it would become the largest tight oil and gas source in the United States.
Oil Prices Could be Affected by Continuing Arab Gulf Tension
The first half of 2017 was markedly quiet in terms of geopolitics. However, this all ended in June when the Qatar blockade occurred. This happened because some of Qatar’s neighbours decided that the nation was too cosy with Iran and that it had funded terrorism. Qatar stood its ground and refused to bend to Saudi Arabia and its cronies and so the blockade continues. Fortunately, no further demands have been made by the hostile countries and the emirate has managed to evade the restrictions.
For many, the blockade was an attempt by Saudi Arabia to ignite another regional conflict in order to reassert its dominance. If that theory is true then the attempt was a failure. Nevertheless, the price of oil went up consistently.
China Has More Control Over Oil Prices Than OPEC
The price of oil was going up, but OPEC wanted it to rise faster. Meanwhile China became the number one consumer of crude oil and broke records in how much it imported. Analysts suggest that a lot of this oil was being pumped into the country’s underground oil reserves. China doesn’t publish figures for its oil reserves so those interested need to estimate based on satellite images of oil tanks.
Oil Has Underlying Problems, Hidden By Shale
Not everything is as rosy-coloured as the shale industry would like us to believe. Experts warn that all of this positive coverage is hiding some underlying problems. First, it has been noted that the production figures that put shale in the spotlight were initial production rates, destined to decline quickly. Second, there are reports that some of the wells are becoming too long, making it difficult for pumps to extract enough oil. Finally, shareholders in shale companies have been getting annoyed about the lack of profits from their investments.


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