If oil prices rose to US$60 per barrel, the price signal would be enough to trigger a new boom in North American oil production, the International Energy Agency reported last week.
“We may well see, in a short period of time, strong production growth coming from North America and elsewhere,” said Executive Director Fatih Birol. “Prices around $60 would be sufficient.”
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In that event, “U.S. shale drillers could find it commercially viable to revive production at some mothballed wells and boost output by more than one million barrels a day by early 2018,” Bloomberg writes, citing Vienna-based consultant JBC Energy GmbH.
Even with oil trading in the $53 per barrel range, the number of active drilling rigs in the U.S. was up to 428 earlier this month, according to oilfield services giant Baker Hughes, compared to 328 in May.
“As soon as OPEC moves into a position of trying to manage the price, it basically takes care of the downside risk,” Oslo-based commodities analyst Bjarne Schieldrop told the news agency. “The consequence is increased U.S. production.”
