Higher demand is needed to end oil glut – but will it come? – Houston Chronicle

At various points over the past year, hopes have risen that production cuts by OPEC would succeed in draining the world’s oil inventories enough to bring prices into the $55-per-barrel range needed for U.S. producers to really get moving again.Those hopes have been dashed consistently, with prices lingering below $50, and now economists at the Dallas Federal Reserve say that the supply glut is likely to continue far into next year. That’s bad news for Houston’s oil-bound economy, which may not see the strong recovery that some have anticipated.The culprits in all this are U.S. shale drillers. Over the past year or so, they have more than doubled the rig count, bringing so much supply online that the market has yet to tighten enough to force prices up – even as the OPEC-led coalition of oil producers extends output cuts of 1.8 million barrels per day into next year. (Robust oil shipments from Libya and Nigeria aren’t helping, either.)

Source: Higher demand is needed to end oil glut – but will it come? – Houston Chronicle

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