A Fruitful Decade for US Shale Production | Wibest Broker

The United States has grown into the biggest shale gas producer this decade, and 2019 is its lucky year. Shale gas demand and production has rapidly grown as an available source of natural gas in the country.

It was just ten years ago when the United States placed third in the global oil and petroleum industry. It used to trail behind the likes of Saudi Arabia – OPEC’s de facto leader – and Russia – OPEC’s most significant ally.

And a decade later, America rose to the number one spot as the current president, Donald Trump, calls to maximize production. Meanwhile, protests and controversies bombarded Trump’s orders and his withdrawal from the Paris Climate Change Agreement.

US shale production may slow down, but it’s still believed to hold the number one spot for some time.

The booming industry goes by the country’s new application of horizontal drilling and hydraulic fracturing technology. The innovations in new resources have offset contraction from other conventional energy resources in the United States.

Just recently, the United States Energy Secretary Dan Brouillette told reporters commented about the growing energy industry. According to him, it is unlikely that the country’s flourishing production will end soon.

Brouillette stated that US shale producers have evolved and can now adapt better to the volatile oil market. He explained that it was all possible thanks to technological advancements and improvements productions, especially drilling.

The US officials claimed that the recent events regarding OPEC and in the Middle East failed to send prices to every direction.

2020 Black Swan

As the year closes to an end, investors are looking carefully at the booming US shale production. But of course, experts have mixed sentiments surrounding the industry.

Some experts believe that the sector is the next black swan of the coming generation, or in 2020 alone.

However, the global oil market is greatly affected and hurt by the increasing US shale supply. That is despite sanctions on Venezuelan and Iranian oil.

Also, it comes against the OPEC’s efforts to prop up oil prices, which meant deeper cuts and extended output.

The Energy Institute Administration estimates that US shale oil production will grow by 900,000 barrels per day in 2020. And according to shale companies’ CEOs, the output will increase by 400,000 to 700,000 barrels per day next year,

However, experts say that the problem with those forecasts is balancing historical rates of improvements. This analysis means it will continue to go forward, just like how shale grew in the past few years.

So, what does this mean? Should investors be alarmed? Or should they turn bearish? They can only tell by time, or for the US shale’s case, next year.