On December 4, 2014 9:54 am
U.S. oil production could increase next year to levels not seen since the 1970s, despite OPEC’s efforts to muscle out American shale producers. While U.S. oil production is predicted to rise by another million barrels a day during 2015 from the current 9 million barrels a day, forecasts are coming down on expectations that OPEC ‘s unwillingness to cut production will keep a lid on prices well into next year. Lower prices limit new drilling and hit high-cost wells first. Saudi Arabia may continue to stay away from cuts even if prices continue to move lower: OPEC’s biggest producer now expects Brent crude to stabilize at around $60 a barrel, which is a level the Saudis could withstand, according to a Dow Jones report Wednesday . But analysts say the U.S. industry, which has turned around its fortunes with new technologies in less than a decade, is expected to drill the most-efficient wells, and production will continue to grow-even with lower prices. There is also a gusher of new offshore oil production coming online in the Gulf of Mexico. The Fed in its Beige Book Wednesday made note of the fact that drilling activity in shale production districts remained steady even with a sharp drop in crude prices. North Dakota showed an increase in November, and the Fed said officials there expect production to continue increasing over the next two years.Citigroup analysts also expect production to rise, and in 2015, it should be in line with the 1 million barrels a day of production growth this year.