for Shale Oil Production
The OPEC commission would examine whether the cartel’s behavior is designed to disadvantage U.S. oil producers and secure market power through anti-competitive behavior.
While this past weekend’s earthquake in Oklahoma will not likely bring drilling to a halt, it could usher in a new era of heightened oversight on fracking in a state that has seen increasing investment from shale companies in recent years.
Despite the DOE and others making the case for a slimmer Strategic Petroleum Reserve, the U.S. is still vulnerable to wild price swings and global supply outages.
Hedge fund sentiment in the oil markets has turned considerably bearish as of late. While it may be premature to say prices have already peaked for the year, a sustained bull run for the rest of 2016 appears less and less likely.
Like presidents before him dating back to Richard Nixon, Barack Obama pledged to reduce dependence on crude oil imports and sever the country’s reliance on OPEC oil. But unlike others, Obama saw overall energy security improve markedly during his presidency.
Sharper-than-expected decline rates as a result of limited investment and a major cutback in capital expenditures for brand new projects are setting the stage for a dramatic market shift by 2018, according to a major consultancy.
A general consensus has emerged that upstream investment cuts will eventually push prices upward, resulting in a potentially dramatic correction that rattles the global economy. A price spike, while possible, is not yet a forgone conclusion.
Despite oil prices returning to the $50 level, expectations of a sudden surge of new oil production in the U.S. are unfounded.
Crude export deals so far have been “opportunistic” and isolated in nature and have gone to a wide variety of buyers. Cargoes will continue to trickle out, but a gusher won’t happen unless domestic production rebounds significantly.
The latest long-term projections from the EIA regarding the U.S. oil market are certainly plausible, but they will likely face a lot of skepticism because of how both supply and demand have reacted in the current low oil price environment.