Shale boom confounds forecasts as US is set to surpass Russia, Saudi Arabia. Reuters is reporting:
Four years into the shale revolution, the U.S. is on track to pass Russia and Saudi Arabia as the world's largest producer of crude oil, most analysts agree. When that happens and by how much, though, has produced disparate estimates that depend on uncertain factors ranging from progress in drilling technology to the availability of financing and the price of oil itself.
Forecasts for U.S. shale oil production vary from an increase of 7.5 million barrels per day by 2020 – almost doubling current domestic output of 8.5 bpd -- to a gain of 1.5 million bpd, or less than half of what Iraq now produces.
The disparities are a function of the novelty of the shale boom, which has consistently confounded forecasts. In 2012, the U.S. Energy Information Administration (EIA) estimated that production from eight selected shale oil fields would range from 700,000 bpd of so-called tight oil to 2.8 million bpd by 2035. A year later, those predictions had been surpassed.
"The key issue is not whether production grows, it's by how much," said Ed Morse, global head of commodities research at Citigroup in New York. "We're only at the beginning of the first inning and this is a nine-inning game."