OPEC agreement is unlikely to survive into 2019, says Macquarie's sector specialist. Volume of shale is nullifying OPEC's efforts to boost price.
The OPEC-led production cut agreement extended last month until February 2018 is unlikely to survive beyond that, the head of European oil and gas research at Macquarie has warned.
Noting that members of the oil cartel were a "disparate bunch", Ian Reid told CNBC's Street Signs on Thursday that the key question was whether they could extend this agreement once again into 2019.
"I think that's going to be a very hard ask to be honest. We actually see this OPEC agreement breaking up towards the middle of next year. In that case, we're going to see a huge amount of extra oil on the market next year," Reid warned. The inability of OPEC's efforts to bolster the oil price has a readily identifiable cause, he added.
Source: Bloomberg
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