“If OPEC and OPEC are not able to deliver, then the crude oil market in 2017 will be from the surplus to the shortage. The oil market rebalancing is the core factor driving oil prices. But for the joint production, can not be expected to be too high.” Jin Xiao said.

From the history of Russia cut “performance”, Jin Xiao believes that the cuts may be more symbolic significance. Cut more need to rely on their own efforts to OPEC. In the past 30 years of 15 large and small production, only in the price rise cycle, OPEC did not deliver production commitments, and other times you can cash, cash degree will change with time.

Is expected to 3350-3400 million barrels / OPEC in 2017 in the production area, which means that the past two years to add 3 million barrels / day of the end of period, at least temporarily.” Jin Xiao said.

If the OPEC output is no longer growing, then the supply variables will depend largely on whether the U.S. shale oil production to “comeback”. With the rise in crude oil prices, the U.S. shale oil enterprise’s financial situation has improved, the United States continued to increase the number of well drilling, production began to recover.

Sui Xiaoying said that rising oil prices relatively low cost push part of shale oil production, such as the largest shale oil producing areas have been part of the Permian Basin drilling restart. The number of drilling is the lowest point last year has increased 40%, the shale oil production also began to rise, shale oil production in the region accounted for more than 40% of the shale oil production in the United states. When oil prices rose to near $60 a barrel, including Buchan, Eagle Ford, two other major American shale oil producing areas will also be large-scale production, production of shale oil before the three large area accounted for 80% of the total output of U.S. shale oil.

“At present, the breakeven point of shale oil in the near $50 a barrel, the operation cost of less than $20 a barrel, so the current oil prices for shale oil enterprises is profitable, the late American shale oil supply will be restored, which is the main restriction of crude oil prices continue upward from the original.” Huang Liqiang said.

“We see the oil rig number rose gradually, while the majority of oil and gas companies in 2017 annual increase in capital spending plan. However, the oil and gas company is still in the repair phase of the balance sheet, it does not support a substantial increase in capital expenditure.” Jin Xiao said.

Has been released from 2017 business plan of the company, is expected to increase by 4% and 24% respectively, compared with 2016 capital expenditure integrated oil companies and independent oil companies.

Jin Xiao believes that even if the capital expenditure has increased, it is difficult to resume to the level of 2015, because in the past two years the capital expenditure of oil and gas companies fell up to 74%. Therefore, in 2017 the U.S. shale oil production will remain at 2016 levels has been very good.

Shock or become the norm