Exploration & Production

OPEC should be worried about dollar strength

US oil production and the strength of the dollar could prove a double whammy for OPEC when the oil producers group meets in May US oil production and the strength of the dollar could prove a double whammy for OPEC when the oil producers group meets in May.
By Peter Stewart 5 April 2017 0 25363
An oil rig in the Permian Basin. US production is offsetting OPEC cuts. (Devon Energy)

When OPEC meets in May to discuss whether to extend the production cuts agreed at the end of November last year, the group may face a combination of growing US oil production and the impact of a strong dollar on demand growth. 

The US dollar index has been buoyed in recent weeks by an interest rate hike by the Federal Reserve, while US oil, gas and coal production are all rising in response to President Donald Trump’s deregulation of fossil fuels.

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