U.S. Shale Operations Cushioning ‘Iraq Effect’ on Oil Prices

The rise in crude oil extraction from shale in the United States has been lessening the effect of the fighting in Iraq on the price of oil, according to some oil analysts. And a recent report by Barclays says this isn’t just a coincidence.

Jun 24, 2014 at 9:57AM

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article:

The rise in crude oil extraction from shale in the United States has been lessening the effect of the fighting in Iraq on the price of oil, according to some oil analysts. And a recent report by Barclays says this isn't just a coincidence.

The increased application of methods such as hydraulic fracturing and horizontal drilling has led to a surge in U.S. crude output and kept the price of oil from rising even further during the past month, according to Nansen Saleri, the CEO of Quantum Reservoir Impact, a consultancy in Houston.

Saleri, once the chief of reservoir management at the Saudi Arabian Oil Co., said the U.S. benchmark crude, West Texas Intermediate, has risen only about $5 to $10 over the past 30 days because of concern about the oil flow from Iraq, the second-greatest producer in OPEC. Without the U.S. surge, that increase would have been more like $20 to $30, he said.

During the week of June 8, the production of U.S. crude increased by 17,000 barrels to 8.477 million barrels, much of it from shale extraction. "The surge in U.S. production is a hugely stabilizing factor," Saleri told Bloomberg news.

The surge is not only making up for expected shortfalls from Iraq, but also from Libya and Iran, Christof Ruhl, the chief economist of BP, said in New York.

Meantime, Ruhl said, amid conflicting reports that Iraq's biggest oil refinery has been captured by Sunni rebels of the Islamic State of Iraq and Syria, or ISIS, "nothing has happened to [overall] production" in Iraq. He pointed to uninterrupted oil shipments from southern Iraq, the region with the country's greatest production.

Although prices are rising more slowly than once feared, they're rising enough to cause oil companies to increase annual spending on extraction to $165 billion in the United States during 2014, according to the British bank Barclays.

A report issued June 18 said the bank's analysts expect spending on exploration and extraction should rise by 9.6 percent over 2013. Barclays had previously forecast increased investment, but raised that estimate because of the recent gains made by ISIS in northern Iraq.

OPEC is absolutely terrified of this game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

 

Written by Andy Tully at Oilprice.com.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers