Published On: Wed, Apr 12th, 2017

Global Energy: A Look Into the Future of the Shale Oil Market in North America

The shale boom had a significant impact on financial markets and thousands of US jobs were created to keep pace with demand, all of which prompted OPEC members to reduce oil prices and increase production, back in 2014.

That had an adverse effect for a while, but shale production has rebounded in a big way and is now looking to gain significant momentum in order to consolidate its position in the global energy markets and improve future prospects further.

Here is a look at how the shale oil market is currently faring and what the future might hold. There is an overview of current production levels and factors that will impact on future oil demands in the US. An insight as to what is causing a spike in demand and some predictions on the what the future holds for shale oil producers.

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Plenty in reserve

The overall conclusion when you look at the figures is that the US has managed to accumulate significant levels of proved shale oil reserves.

One of the significant drivers behind this move to boost reserves is the fact that there are an increasing number of new and existing environmental restrictions and reforms that are working to limit the use of coal as an energy source.

Even allowing for the new president’s commitment to boost coal production, they are going to struggle to compete on price and productivity efficiency levels compared to shale. When you combine the efficiency levels of shale oil producers with a general rise in world energy demands, you have a scenario where those shale oil reserves look justified.

The Green River Formation in Colorado, Utah, and Wyoming are prime contenders for the number one spot where the biggest shale deposits in the world can be found, and they are major contributors towards the healthy inventory levels being recorded.

To understand more about how these factors can influence financial markets and to gain a clearer insight into investment opportunities in this sector you can check out Oil and Energy Investor for details that could help your research.

Export levels at a record high

Shale producers are currently taking up the slack created by a cut in production levels by OPEC members and 2017 is proving to be a record-breaker so far with an unprecedented one million barrels of oil being exported on a daily basis.

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It could be argued that OPEC are playing a dangerous game in trying to protect their prices by limiting production levels, as US shale producers have stepped in to fill the void.

Some analysts are putting forward an argument that these record export levels of seven million barrels of crude finding their way into world markets are a sign of how the future energy market is going to take shape.

Upping the production levels to one million barrels a day is a new benchmark and it may well prove significant that the market void created by OPEC was so readily filled by shale producers.

More to come

The weekly inventory levels recorded by the EIA show that US oil stockpiles have been able to reach well over 500 million barrels.

What is more encouraging if you are a shale oil producer or an investor with an interest in this market is that recent figures show that the industry is in good health and managed to export over seven million barrels in one week, while still managing to put away nearly ten million barrels into storage during the same period.

Shale producers in the major north American hotspots and beyond are driving forward with ever-increasing production targets that seem to be heading towards the next big target of ten million barrels of oil per day.

The US government is anticipating that shale production will increase by a further 80,000 barrels a day and beyond during 2017, meaning that a ten million barrel a day target is hardly a fanciful dream.

Rising demand

It seems that a combination of a cutback in production by OPEC and the fact that the price per barrel has reached a stable level that is around the $50 mark have helped to implement a noticeable rise in shale production.

It might possibly be a bit too early to be totally convinced that recent trends have become the new normal when it comes to production output levels, but global demand is on the rise which means that domestic and international requirements are likely to want a good percentage of shale oil output for the foreseeable future.

Guest Author :

Zak Ford talks about economic matters regarding the energy industry. He is passionate about green energy and writes about this alongside investment matters in his articles.

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