US shale plots production growth despite OPEC’s warning
HOUSTON: US shale oil producers are plotting ambitious production growth outside the red-hot Permian Basin in Texas, widening a resurgence that could confound OPEC’s strategy to tighten global supplies.
As shale firms rebound from a two-year price war with OPEC, many are planning to expand production in North Dakota, Oklahoma and other shale regions.
The Permian – America’s largest oilfield – has already seen output jump in the past six months.
Hess Corp, Chesapeake Energy Corp, Continental Resources Inc and other firms detailed their growth plans at an energy conference in Houston this week.
The projects they outlined would result in a steady supply of American crude exports through the next decade. Rising US energy clout has frustrated efforts by the Organization of the Petroleum Exporting Countries to control global oil prices through a production curb announced last fall – its first in eight years.
The rise in US output was enough to boost domestic crude stockpiles last week by 8.2 million barrels, more than quadruple estimates from analysts polled by Reuters.
The unexpected supply surge pushed US oil prices down more than 5 per cent on Wednesday to close at US$50.49.
The price drop underscored the growing impact of US shale production on global supplies and prices relative to OPEC member nations, which once exercised dominant influence on global markets.