OPEC agrees to curb output amid low oil prices
Sunday, October 2, 2016
With Saudi Arabia softening its stance with Iran in response to the increased pressure of low oil prices, OPEC agreed to modest oil output cuts on Wednesday in the first deal of its kind since 2008, according to Reuters.
The Organization of the Petroleum Exporting Countries estimates its current output at 33.24 million barrels per day and plans to reduce that to 32.5-33.0, reestablishing its abandoned production ceilings. How much each country will produce is slated for OPEC’s next meeting in November.
Saudi Arabia is the largest OPEC producer at more than 10.7 million bpd. With the United States and Russia in the conversation, the three largest producers combined exact a third of the world’s oil.
According to OPEC sources, Saudi Arabia offered to reduce its output to 10.2 million bpd if Iran agreed to freeze production at its current levels of 3.6 to 3.7 million bpd.
Learn more: Reuters > OPEC agrees modest oil output curbs in first deal since 2008
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.