US as swing producer

[The Revival of US Oil Production, 2007-2012]

Let’s take a look at the table above. Apart from a few states such as Montana, Louisiana, and Alaska, Oil production in general has increased. The most notable development was in Texas, whose production reached 1.987 million barrels per day in 2012. That’s a considerable increase considering how Texan production was 1.072 million barrels per day in 2007. Note also that after falling to 5 million barrels per day, US oil production in total (including both conventional and unconventional oil production) has increased to 6,474 million barrels per day in 2012.

Skeptics are questioning whether the era of new LNG liquefaction capacity in the US is over. Since the start of 2015, over 50 US shale producers have filed for bankruptcy. But shale oil and gas has continued to flow, in part because even when drillers go bankrupt, their existing wells are usually left in production by their creditors.

In 2014, Reuters surveyed major consultancies, banks and independent analysts to determine the minimum oil price OPEC members require in order to meet government expenditures.

[Oil prices needed to meet expenditures]

[Marginal cost of producing one new barrel of oil ]

The survey concluded that countries such as Iran and Nigeria required the highest oil prices to cover their expenditures, while Kuwait and Qatar will be able to cover their obligations with today’s lower prices.