Is Opec on the verge of making the same mistake all over again?
The cartel managed to ignore the rise of the US shale industry at the start of this decade until its output growth eventually overwhelmed the oil market. That triggered one of the biggest price collapses in history as Opec fought fire with fire, opening the spigots to try and drown out its upstart competitor.
But for the past 15 months Opec has returned to market management and supply cuts, in alliance with Russia, after the price collapse from $100 to $30 a barrel became too painful for its members to bear. The result has been stronger oil prices but also the rejuvenation of the shale industry.
US output has reached record levels above 10m barrels a day and is now expected to reach 11m b/d by the end of this year. The growth is coming much faster than many initially anticipated, with the US Energy Information Administration revising up forecasts month after month as the industry becomes more adept at squeezing additional barrels out of each new well.
Its forecast for average US crude production in 2018 has leapt 800,000 b/d in just six months, riding a wave of stronger prices.
Opec, like in 2010 to early 2014, is back to acting like this is not an issue.