for Shale Oil
Oil majors continue to ratchet up activity in U.S. shale, even as other producers cut back.
U.S. oil exports recently hit new highs with a record number of export destinations, but shale's recent woes mean continued success is not guaranteed.
Production gains cannot mask the problems facing the shale industry, but the offshore sector is seeing an increase in activity.
The top forecasters for the oil market have repeatedly downgraded their estimates for demand. Absent a turnaround in global growth, the pitfalls for the oil market may only grow worse.
The members of the OPEC+ coalition have different economic incentives. Most member countries are producing as much as they can and have little scope for higher output, so they are on board with an extension of production cuts.
For the United States to realize its foreign policy ambitions, domestic oil demand must be reduced.
However, it isn’t clear that newfound interest in a variety of shale plays outside of West Texas will prove durable.
Shale executives have repeatedly proclaimed their commitment to capital discipline, promising not to return to profligate spending in pursuit of growth at all costs. But output is growing sharply, poised to reach 12 Mbd in 2019.
Retail gasoline prices are forecast this year to reach their highest summer average since 2014, potentially wiping out household gains from last year’s tax cut.
Some commentators argue that due to the rapid rise in shale production, reliance on petroleum is not a national economic and security threat. But oil dependence remains a strategic vulnerability for U.S. consumers and businesses.