The United States will not come to the rescue. Production from shale oil basins is increasing at a slower rate, as major areas where producers can drill are running out.
Read also: A record jump in US shale oil production
Production in the United States declined at the start of the pandemic, and is still about 800,000 barrels per day (bpd) below the record level of 13.1 million barrels the country set in early 2020. Growth is likely to be around 560,000 bpd this year, according to research firm Envirus. (Inverus).
Possible headwinds
The slowdown comes even as ExxonMobil, Chevron and their rivals pump more oil from the Permian Basin of West Texas and New Mexico.
Exxon Mobil has the highest annual profit ever
Chevron CEO Mike Wirth told Bloomberg TV on March 1 that global spare production capacity is limited, and that growth in US shale oil supply is unlikely to make up for the shortfall if demand accelerates later this year, making OPEC It is the flexible producer in the world. “As we enter the second half of this year, upside risks begin to accumulate,” Werth added.
Nevertheless, potential headwinds to oil demand lurk in the market, as fears of a global recession remain at a time when central banks are tightening monetary policies in their bid to tackle inflation.
Although Natasha Caneva, global head of the commodity strategy and research unit at JPMorgan, is betting on an increase in China’s consumption of crude oil, she expects the price increase to be “very slow”.
