America’s Next Oil Boom Will Be Even Bigger

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Getty Images

Oil prices are set to rise again due to growing foreign demand, which could set the stage for another American oil boom built on the infrastructure of the first fracking boom, according to an economist who works on energy issues.

“Even with China’s economy slowing, global oil use will still rise by 1.3 million barrels a day this year—equal to the peak daily output of the entire Bakken Shale field,” Mark Mills, a senior fellow at the Manhattan Institute, wrote in a Wall Street Journal oped Monday. “Middle-class automobile ownership in Asia is rising steadily, from today’s average of 60 to 80 cars per 1,000 residents toward the West’s 600 to 800 cars. All the fundamentals point to growing demand for oil.”

“Shale 2.0, when it comes, will be even better,” Mills wrote. “The technology is advancing at a speed usually associated with Silicon Valley. Over the past half-decade, average output per rig has risen at least 400%. Productivity rose 40% last year, despite cost constraints. The rigs are getting cheaper, and the efficiencies brought by the latest tools—from data analytics to robotics to advanced materials—have yet to be deployed.”

Mills believes that today’s low prices may be worse for major foreign oil producers like Russia, Venezuela, Brazil, and Iran than for America. These countries require the price of oil to be above $80 a barrel to balance their national budgets. However, industry experts at RBN Energy believe most new American oil production will be profitable at around $40 a barrel. Such a set up means that the price of oil will be essentially permanently locked in at prices favorable to America.
Posted by The Daily Caller.

7 Comments on "America’s Next Oil Boom Will Be Even Bigger"

  1. Amen . . . Amen . . .
    Because what you just read, is a prayer. The only way oil gets back to $80 a barrel in the next 2 years is if Saudi Arabia and Iran get into a shooting war,or the world experiences hyperinflation from all the fiat currency printing in QE4 which is coming. More oil being pumped, and no one to use it. Just take a look at the Baltic Dry Index. Nobody is shipping jack sh!t. China is done building their empty cities. There are a higher percentage of people out of the U.S. workforce than there were during the great depression (the breadlines are hidden by EBT and SNAP) And things are about to get a hell of a lot worse. The world’s stock markets are down a collective 20% since their 2015 peaks, and they are going to fall a lot more. I guess the central banks will have to zero the interest rates. Oh wait, they are already zero or NEGATIVE.

  2. Actually, upon further review…. I am wrong.

  3. The next boom may be bigger , but when is the boom ever going to get smarter ? American E&P’s are experiencing the same business pitfalls now that they experienced in 2008 , 2003 , 1995, 1986 and 1983. The major ramp up to produce at any cost , overpayment for land, deep pockets mentality and lack of utilizing new technologies to lower production costs. This is once again a nod to the Bigger is not always better argument.

  4. How does American companies getting by on $40/oil equate to a bigger boom than the one we just experienced? Credit will get much tighter which means cost of capital goes up. So who’s to say that $40 is still going to be profitable? And even if global demand does increase by 1.2m bbls, Iran will likely increase their output by 2m by the end of 2017.

  5. With Saudi Arabia continuing to pump and Iran now in the market, it’s hard to say when oil prices will escalate to what they once were. Necessity is the mother of invention and it was due to the high oil prices that fracking was invented and developed. Now, each time the price of oil rises, the fracking industry will kick into gear and adjust it accordingly. Just my 2 cents.

  6. Mohammed Iqbal | January 28, 2016 at 10:05 am | Reply

    Is it sure that ,,oil price will become high

  7. Mohammed Iqbal | March 11, 2016 at 10:52 am | Reply

    is it really, next american Oil boom will be even bigger?
    When oil price will reach $ 70 per bbl?

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