Sorry, OPEC: US shale oil drillers aren’t turning off the tap anytime soon.
Because of US shale oil production, U.S. production is once again booming. Furthermore, analysts see few headwinds strong enough to jolt the recovery off course.
Output in the American oil patch has surged about 9 percent to 9.3 million barrels over the last eight months. That recovery is seen continuing after OPEC’s decision last week to keep a lid on production for another nine months, a move that helps to prop up oil prices.
Saudi Arabia tried unsuccessfully for two years to wash high-cost U.S. producers out of the market by letting prices plummet. The top OPEC exporter then coordinated a 1.8 million barrels a day output cut among two dozen countries. However, OPEC was forced last week to extend the deal because it failed to shrink global stockpiles. This was in no small part due to resurgent U.S. production.