It is never quiet on the oil market, that is certain. After reaching two-and-a-half year highs over the last few weeks, now the price of crude oil is once more falling. As was the case in 2015, the United States and their shale oil extraction is to blame for this.
Analysts expect that the United States are upping their shale oil extraction in order to offset the efforts by OPEC members, who are limiting their own crude oil production in order to stabilize the oversupplied market.
The oil output of the United States has increased by almost 15% since 2016. This is contrary to the case with OPEC member states and other countries supportive of OPEC’s reduction policy, such as Russia. The high prices of oil serve as stimulus for the United States to increase their own production, since their shale oil process allows them to pump oil at lower costs and the resulting price decreases don’t bother them.
Yesterday US officials announced that shale oil extraction will be going up next month, which has been the trend all year.
Earlier today the Brent crude was trading around $62.80, while the WTI was at $56.55. Investor sentiment currently indicates that the oil price highs were only temporary and subject to a correction.
