U.S. Oil Boom Divides OPEC

from The Wall Street Journal..

May 27, 2013, By BENOÎT FAUCONSARAH KENT and HASSAN HAFIDH

Cartel Struggles to Respond to Rise of Shale Drilling

The American energy boom is deepening splits within the Organization of the Petroleum Exporting Countries, threatening to drive a wedge between African and Arab members as OPEC grapples with a revolution in the global oil trade.

OPEC members gathering on Friday in Vienna will confront a disagreement over the impact of rising U.S. shale-oil production, with the most vulnerable countries arguing that the group should prepare for production cuts to prop up prices if they fall any lower.

“We are heading toward some problems,” said a Persian Gulf OPEC delegate.

African OPEC members such as Algeria and Nigeria—which produce oil of similar grade to shale oil—are suffering the worst effects from the North American oil boom. Nigeria Oil Minister Diezani Alison-Madueke deemed U.S. shale oil a “grave concern.”

Gulf countries, notably Saudi Arabia, pass relatively unscathed—and are the only OPEC members with the flexibility to cut production. But they are unlikely to let that happen at Friday’s meeting, several OPEC delegates said…

…….

VIDEO

http://on.wsj.com/19jhcVG

Link to the entire article:  http://online.wsj.com/article/SB10001424127887323855804578508871186460986.html?KEYWORDS=OPEC

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