The US is a highly efficient producer of oil. Fracking is a complete game changer, making oil that was once difficult to extract, now more cost effective. The US is also blessed with abundant shale oil deposits. Thus, the US is poised to be soon a net exporter of oil.
As pipeline construction finishes in 2019, a flood of oil will be hitting world wide markets. The problem is fighting off a glut of oil. In my opinion, those producers around the world that cannot produce oil efficiently will have to drop out. What happens to the other producers? I am not sure but I am certain that some international deal will be worked out; because otherwise, we are heading for a “train wreck”.
Click on the image above to read the Houston Chronicle article, written by Javier Blas of Bloomberg.