TUJobs states that highly aggressive production growth in shale oil fields has lead to overcapacity in the market and consequently, the falling of oil prices.
Eagle Ford in Texas, U.S., is one of 15 shale oil fields that have taken the world by surprise with a highly aggressive production growth since 2011.
Oil analyst Torbjorn Kjus explains that the U.S. is now producing three times as much shale oil a day as the entire Norwegian oil production. According to Kjus, in October, Norway produced 1.5 million barrels of oil a day, while the shale oil production was just below 4.5 million barrels.
The U.S. production shows no sign of slowing down, something several analysis and energy companies eagerly highlight. This is bad news for Norway, where the oil companies and service industry are downsizing across all corners.
For example, the analyst agency Citigroup expects that U.S. oil production will increase with one million barrels a day in 2015, from the nine million barrels of today.
One of the most important reasons for this is that the break-even price of shale oil projects, the oil prices the companies need to go in plus, are steadily falling.
Previously, there was a lack of belief that shale oil production would be profitable because of expensive and ineffective production methods. However, with several leaps of technology the last years, the oil companies have now reduced costs drastically.