Leigh R. Goehring & Adam A. Rozencwajg
Global oil demand has surged over the last decade. As a result, even with the increase in US shale oil production, OPEC has needed to add nearly 3 mm b/d of new supply to keep the market balanced.
With conventional production growth turning negative outside of the US and Canada, it is easy to see how dependent the world has become on the growth of the US shales, and the Permian basin in particular.
Any faltering in shale production growth should result in a rapid market tightening. In this situation, robust oil demand will need to be rationed by price – a situation not unlike what occurred between 2000 and 2008—a period that eventually saw oil prices exceed $140 per barrel.
Download our newest commentary, What is Happening to US Shale Production, where we explore how these dynamics play into the supply and demand balances for the remainder of the year and into 2020. We also discuss what strategies can be used to take advantage of these developments.
Additionally, this commentary includes extensive analyses on: