(DENVER, C0) — Richard Fisher, president of the Dallas Federal Reserve, didn’t mince words Feb. 11 when he said that OPEC “engineered” the drop in oil prices to put U.S. oil producers out of business. But Fisher is not the only one to call out OPEC for taking aim at U.S. shale: Dan K. Eberhart, CEO of oilfield services company Canary, LLC, picked up on OPEC’s provocative actions months ago.
“What’s shaping up is a ‘battle royale’ between the U.S. shale producers and OPEC,” Eberhart said during a Dec. 2 interview with CNBC. “It’s a case of who’s going to blink first. I think OPEC, by deciding not to change their production quota, is betting on the U.S.”
What OPEC is doing, Eberhart explained, is applying downward pressure on oil prices by significantly contributing to excess oil supplies during a period of lessened demand. The cartel has been exacerbating the price drop by charging the U.S. less for its oil imports. OPEC is fully aware that the lower prices go, the more difficult it becomes for U.S. shale companies to recover their costs, and ultimately, to continue producing.
Eberhart commented on OPEC’s anti-shale actions during a recent interview with CNNMoney about falling oil prices’ impact on North Dakota boomtowns in the Bakken shale play region.
And during his Dec. 2 speech at the Offshore Southeast Asia (OSEA) International Oil & Gas Industry Exhibition & Conference inSingapore, “Globalizing Shale,” Eberhart warned guests that OPEC has had U.S. shale in its sights since early fall, 2014.
“In September, OPEC pumped more oil than it had during the previous 13 months, and until now has not been adhering to its own quota of 30 million barrels a day,” Eberhart said, adding that OPEC’s battle with shale was heating up.
Today, Eberhart says, it’s gratifying to see a respected leader like Fisher take the same stance. “I applaud Richard Fisher, not only for recognizing what OPEC is trying to do, but also for his bold public remarks on the situation.
“This is a battle, but U.S. shale producers are becoming increasingly more innovative and effective at drilling more for a lower cost. There’s every reason to be optimistic.”
About Canary, LLC
After ten acquisitions and seven decades, Canary, LLC, is now the largest private wellhead service company in North America and one of Inc. Magazine’s 5000 fastest growing U.S. companies. Canary serves its clients and the public through quality drilling and production services, local charitable endeavors, and educational campaigns concerning our nation’s energy policies. Check out Canary at canaryUSA.com, fb.com/canaryconnects, or @CanaryConnects.