Some OPEC members seem keen to show they have shed any prior naivete about shale.
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The history of the relationship between OPEC and the U.S. shale oil industry has evolved a great deal since the cartel discovered it had a surprise rival emerging in a core market for its oil around five years ago.OPEC now realizes supply cuts and higher prices only make it easier for the shale industry to deliver higher profit after it found ways of slashing costs when Saudi Arabia turned up the taps three years ago.In the Permian Basin – the largest U.S. oil field – Parsley Energy Inc., Diamondback Energy Inc. and others are pumping at the fastest rate in years, taking advantage of new technology, low costs and steady oil prices to reap profits at OPEC's expense. By the same token, some U.S. shale leaders may also want a better insight into OPEC thinking and help OPEC understand that shale is not a flash in the pan.OPEC meets again in November to reconsider output policy.While most in the group now appear to believe that shale has to be accommodated, there are still those in OPEC who think another fight is around the corner.
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