As he usually does each quarter, Halliburton Company (HAL -3.10%) President Jeff Miller recently provided investors with his company's view on the oil market. Last quarter, he provided a clue on when the oil market might turn. This quarter his comments seemed to indicate that when the turn comes, it could lead to a significant change in America's role in the oil market. Here's a breakdown of his comments.

The demand response
Miller led off his comments by detailing the supply and demand picture. He noted that,

Over the past several months global demand expectations for 2015 have been consistently revised higher now calling for an increase of over 1 million barrels per day including recent upward revisions for both US and Europe.

One of the reasons the oil market went into a tailspin was because demand for oil was weaker than expected last year. This was due to a combination of persistently high oil prices along with slowing economic growth. Now that oil prices have been lower for several months that's leading to incremental demand for oil. It's an encouraging sign for the oil market as higher demand tends to lead to higher oil prices.

The supply surprise
Miller then turned his attention to the other side of the oil market: Supply. The other factor contributing to the oil price crash last year was the fact that supply growth was more robust than expected. This led to a glut of oil on the market and a deep downturn in oil and gas activity. Miller noted that in terms of supply,

[...} we're all watching US production levels very closely given the volume expansions that took place throughout 2013 and 2014. Recently monthly production estimates have been encouraging, however, showing significantly lower production growth and actually projecting oil production to be flat to down in the major basins.

Miller notes that once robust U.S. oil supplies are now showing a significant slowdown. This is due to the fact that oil companies are really pulling back on new wells. In fact, in Core Labs' earnings release it pointed out that just to keep production flat in the Bakken Shale of North Dakota oil producers need to drill 115 wells per month. However, in February only 42 new wells were completed, which is leading to a slump in production from the play.

In addition to a noticeable slowdown in U.S. production growth, international oil production from non-OPEC producers is also coming down. Miller calls this "an overlooked positive factor." In fact, he pointed out that by, "comparing the IEA forecast exit rate for 2015 against 2014, key non-OPEC contributors are expected to decline."

The combination of stronger than expected demand along with much slower than expected supply growth is expected to lead to a more balanced oil market in the future. That said, Miller did note that, it could be months or even quarters before we do finally reach equilibrium.

When balance is restored
Still, the very fact that balance is beginning to be restored to the oil market is a positive for energy companies, as well as their investors. In fact, Miller sees very positive signs for the North American oil market's future based on how it has reacted during the current downturn. Miller pointed out that,

[...] it is our view that North America will continue to be the most adaptable market in terms of addressing well economics through both efficiency models and technology uptake. One way to look at it is that the US unconventional business is now the lowest cost, fastest to market incremental barrel of oil available in the world today.

Said another way, the unconventional shale market has become the new swing producer in the oil market. This, in a sense, replaces Saudi Arabia as the swing producer as American producers have brought their costs down to such a level that they can ramp production up or down to very quickly respond to changing oil prices. It's really a potential game-changer for the oil market as it has broken OPEC's control over oil prices. That's why it has turned its focus on controlling its share of the oil market instead of swinging into action to cut production when oil prices collapse.

Investor takeaway
Halliburton's President sees the oil market improving to the point where it's very close to reaching equilibrium. However, as important as that is in the near-term for oil producer profits, what's even more important is that this downturn has demonstrated how quickly the U.S. oil market can respond to changes in oil prices. So, in the future when oil prices recover there will likely be a very dramatic uptick in U.S. oil production leading to a real gusher of profits for oil producers due to how much they've been able to cut their costs over the past year. It's a significant change that will only make America's oil production more important to the global market in the years ahead.