Opec supply cuts vs shale production: which will win the oil war in 2018?
London — Oil traders are going to have their work cut out for them in 2018. Oil cartel Opec and its allies are heading into the second year of supply cuts to wipe out the global oil glut, while rising US output is threatening those efforts. Geopolitical tensions also add a wild card to the market mix. As oil watchers seek to plot a course through the year ahead, they’ll be paying close attention to signals ranging from time spreads to options contracts. Here are five key barometers to watch as 2018 unfolds. 1. The shale signal West Texas Intermediate’s (WTI) discount to Brent closed at its widest level in more than two years on Tuesday as an explosion at an oil pipeline in Libya boosted the global benchmark. This came after Hurricane Harvey kept supplies locked in the US earlier in the year, providing the first trigger for a wider spread and bumper US exports. With shale growth driving forecasts of record US supply in 2018, this could lead to a further expansion in the discount, whi...
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